Online retailers: Stop trying to beat Amazon

Brick-and-mortar stores forced to close due to pandemic lockdowns had to quickly pivot to an online-only model. Understandably, newcomers to the digital retail scene found themselves behind the curve in attracting online buyers, particularly in the face of popular established events like Amazon Prime Day. This year’s Prime Day, held June 21-22, was reportedly the biggest ever on the platform.

Online retailers that have opted to forge their own path to generate sales often wonder how they can compete with Amazon.

Amazon’s true unique selling proposition is its distribution network. Online retailers will not be able to compete on this point. Instead, it’s important to focus on areas where they can excel.

The reality is that Amazon’s true unique selling proposition is its distribution network. Online retailers will not be able to compete on this point because Amazon’s distribution network is so fast. Instead, it’s important to focus on areas where they can excel — without having to become a third-party seller on Amazon’s platform.

The following are seven key tips that are relevant for online retailers that want to attract and retain customers without having to partner with Amazon or to try to beat it at its own game.

Gain a 360-degree view of the customer

An online retailer needs to consider what kind of experience it wants to create; customers expect smooth processes on every step of their online shopping journey.

One idea is to implement a consumer data platform that will help the retailer gain the best insights into their customers: who they are and what they like, which websites they frequent and other relevant information. Retailers can use this data to then target customers with ads for products they’ll actually want to buy. Consumer data platforms can even help online retailers target consumers across platforms as well as in the store.

Ensure smooth and glitch-free pre-sale transactions

One of the biggest frustrations with online retailers is the performance of a website, from getting on the site through the closing of the sale. If something fails or glitches at any point in the process of searching for a product and paying for it, the customer will leave and not come back.

The solution to this problem involves a lot of testing of the user interface to ensure a good user experience. Tests should be done on all e-commerce segments on a site, including the basket and ad banners. By inserting tags along the customer journey, a retailer can track lost sales and see where problems happen on their website.

Offer a broad variety of payment options

As a payment option, PayPal recently experienced a record 36% year-on-year growth in payment volume between the third quarter of 2019 and Q3 2020. Despite PayPal’s popularity, Amazon does not accept it as a form of payment.

To cater to the largest audience possible, online retailers must offer as many of the usual payment options as possible. These include all major credit cards, PayPal, Stripe, Apple Pay, Google Pay and even invoices (particularly for business customers).

Additionally, all of these payment options need to be tested on a regular basis to make sure they work seamlessly for customers. There are also buy now, pay later service providers, such as Klarna, Affirm and Afterpay, which offer another option for online retail customers.

Optimize logistics and delivery services

It’s frustrating for a user to order something online, pay for it, and then find out that it will take several weeks for the retailer to fulfill the order because the item is out of stock. Online shops must ensure that they are correctly predicting and tracking replenishment of their stocks.

Businesses can also consider setting priorities so that preferred customers or larger buyers would get the priority for their order of a high-demand item. Additionally, retailers should make sure they are properly utilizing third-party logistics to avoid bottlenecks and unnecessary shipping backups. Online retailers can also win over users by offering chatbots so that customers can get an immediate response to questions about their orders or a delivery.

Simplify the returns process

The post-purchase experience is very important to a customer, meaning how they are treated after they have received a product, and this particular point is something that Amazon excels at.

If there was an error in the delivery, how easy is it for a customer to get the problem corrected? Can the customer print their own return label? What are the logistics for returns? These are all critical points for online retailers to consider. It’s also important to pick a third-party logistics partner that can handle returns quickly and reliably. Many brands offer free returns to online customers.

Personalize the online experience

There are three areas where online retailers can make the buying experience personal: marketing, loyalty and value-added services. Having personalized interactions in those areas makes a consumer feel like a brand cares about them.

For example, when the customer comes onto the website, a retailer can welcome them back by name with a flashing banner. Many e-newsletter distribution platforms allow businesses to offer a variety of personalization and customization options for emails.

Another tip is to offer loyalty rewards and discounts if someone signs up for a loyalty program. The ability to customize or design a product themselves is another great way to attract and retain customers. Consider Ikea, where a shopper in need of a sofa can go on the website, choose the style, change the materials, select from a variety of colors or patterns, and even add on different parts, such as a footstool. For smaller items and gifts, a retailer can offer personalized packaging, which could even be managed by a third-party logistics provider.

Keep up with the pace of technology

Performance on a website is crucial for an online retailer, so testing will be absolutely vital to making sure that all systems are functioning properly at all times.

Proper load balancing on a platform, which allows for the efficient use of bandwidth, will ensure that the platform can handle peak demand times while not wasting resources during slow periods.

Another technology tip is for sellers to implement a CI/CD (continuous integration/continuous deployment) strategy that enables the quick deployment of updates to an online platform. By breaking a website down into individual elements, a retailer can roll out changes to one element without affecting any other part of the website.

Building a loyal customer base takes time

Trying to be the next Amazon is a lofty task. The company excels at selection and delivery logistics, and it has spent the past 26 years developing its reputation for those characteristics.

Online retailers will have much better chances for success by gaining a 360-degree view of the customer and by adding in elements of personalization. These two trends are not new; they simply accelerated during the pandemic. Those who reacted early to these trends have benefited.

Customers have myriad options when it comes to making purchases online, but online retailers don’t have to go it alone to provide a viable shopping alternative. They can find a good third-party logistics partner that focuses on delivery so the seller can focus on optimizing the customer experience.

When an online retailer has all of the above elements in place, then it’s a matter of steadily building a loyal customer base that comes back time and again for the reliable, personalized service provided by a platform that offers and delivers exactly what consumers want.