Why Delivery is the Answer to Beating Amazon
You may ask yourself, “Why should I try to duplicate Amazon’s business model when I can just sell directly on the retailer giant’s site and take advantage of its distribution resources?” For a while, it seemed like the obvious answer: if you can’t beat ‘em, join ‘em. But then Amazon launched its private labels that cover most verticals—the retailer giant has almost 7,000 products across 74 brands. Only a handful of the labels have the Amazon name attached (AmazonBasics, Amazon Essentials, etc.), keeping most of them unassociated with the retailer’s brand.
Not only is Amazon creating private labels to compete with your products on the site, but it’s also using your product data to its benefit. Based on the data the Amazon team gathers from your products, they know what customers like or don’t like about the product, what they’re searching for, how much they’re willing to pay, and the best time to promote the item. Additionally, the team is sponsoring their products over yours, without needing to spend millions of marketing dollars to do so.
Another important reason to avoid selling only on Amazon? You lose control of your brand and your shoppers’ experience. Of course, Amazon’s user experience is as seamless as it gets, it makes it easy for shoppers to find what they’re looking for, compare products, and purchase with one click of a button (if their account is set up). However, throughout this experience, they’re conveying their brand and engaging with your customers in their own manner. You lose the opportunity to engage with shoppers directly, tell your brand’s and product’s story, and form long-term relationships.
Amazon isn’t the end-all-be-all—to give your customers an experience unlike Amazon’s, focus on delivery.
Using the Delivery Experience to Compete With Amazon
Why delivery? It’s the last impression the customer has of your brand, and one you can easily take advantage of to provide your shoppers with a memorable shopping experience. Amazon has thousands upon thousands of brands selling products on its site—making it impossible for the retailer to create a unique delivery experience for each brand.
Additionally, delivery is a top consideration for customers when choosing where to shop. According to Metapack’s 2017 State of Ecommerce Delivery report, 54% of consumers say delivery defines who they always shop with. If the delivery experience doesn’t go well with the customer, chances drastically decrease of retaining that customer. In fact, 39% of customers say they will never shop again with an online merchant following a negative delivery experience. On top of potentially losing a customer, that same customer could also tell their friends and family, or even worse, post about their negative experience on social media.
Acquiring new customers is estimated to cost six to seven times more than retaining customers. Being able to provide a positive delivery experience allows you to focus on retaining your current customers—a cheaper alternative to finding new ones.
How You Can Meet the Top Delivery Desirables:
According to Metapack, customers are more likely to shop at a store that offers multiple delivery options. Even if most of your shoppers choose the same option each time they shop, they like the idea of being able to determine what best fits their lifestyle.
When asked which delivery options they have taken advantage of, 44% of consumers said they used collect-in-store, 39% used collect from a local pick-up point or shop, 19% used delivery to workplace, 11% used delivery to a locker, and 8% used a personal concierge service.
Additionally, consumers want to know before they get to the checkout page which delivery options the store offers. Over three-quarters of consumers expect a display of delivery options on the product page.
If your brand doesn’t have the resources to offer more delivery options, there are companies you can partner with that provide the technology and manpower you need. For example, Deliv, a same-day delivery service, uses a crowdsourced delivery strategy to expedite the last mile. Because they are crowdsourcing local drivers, the company claims to be cheaper than FedEx or UPS. Deliv is built into the online store, allowing you to offer on-demand deliveries and schedule delivery time slots on the checkout page. Daphne Carmeli, the founder of Deliv, says that the pressure for speedy delivery caused by Amazon works in her favor. While Amazon works on delivery drones and robots, she uses resources that are readily available to her now to quickly turnaround packages.
How many times have you been $15 away from getting free shipping, only to add something to your cart that you didn’t need in order to take advantage of the promotion? And chances are the item you added is more than what you would have paid for in shipping costs in the first place. You’re not the only one—in a recent study, 73% of consumers said they purchased more items to take advantage of a minimum spend free shipping promotion. These types of incentives not only sway customers to complete their online purchase, but it also helps you improve your AOV (average order value).
Flexibility and Personalization
Many companies have taken a more personalized approach with their marketing efforts, customer service, and user experience. However, delivery personalization and flexibility are quickly climbing to the top of consumers’ list of priorities when shopping online. Almost a third of consumers said they had changed aspects of the delivery “on the fly” to secure a delivery time or location.
When it comes to mid-flight delivery changes, brands and manufacturers beat out Amazon. 30% of consumers said they were able to make changes when shopping on a brand’s or manufacturer’s site, but only 26% were able to do this on Amazon.
A trend to consider implementing is a try-before-you-buy service. Similar to subscription services like Stitch Fix and Trunk Club, try-before-you-buy allows shoppers to have items shipped to their house to try on before being their debit or credit card is charged. In this scenario, there’s no loss to the customer— if they don’t like the item, they simply send it back.
Another thing to take away from subscription services is their ability to make their packaging “Instagram worthy.” You have probably seen the videos of influencers unpacking their subscription boxes, and the one thing you always notice is the level of detail the company put into their packaging.
Amazon’s packaging can best be described as efficient. It offers just enough to get it to the customer’s door without any damage. However, there’s no pizzazz—most items come in a plain brown box with the Amazon logo. Inside, brown paper or bubble wrap cushions the item (nothing fancy). This is where your brand can offer something unique and personalized compared to the retailer.
Whether it’s the box design, including a one-pager with a story around the product, or including a small surprise, focus on how you can impress the shopper. For example, Birchbox, a monthly makeup and hair care subscription, has a unique box design for each month—the design is worthy of an Instagram post. Inside the box, Birchbox includes a one-pager that describes each item in the box and how to use them. Which products the team chooses to include in the box are a complete surprise, leaving the customer something to look forward to each month.
Blue Acorn iCi has an Unboxing Lab in our Shelton, CT office—a dedicated room for clients to work with our experts to choose packaging design and materials. For example, we worked with Gerber to create a package that would meet high customer expectations. The white interior promotes sterility and the personal note from the president of Gerber adds a personal touch.
Delivery Loyalty Program
With a growing number of consumers favoring customer-centric shopping experiences, it’s no surprise they want rewards for their loyalty. 79% of consumers say they want ecommerce sites they shop with to offer a delivery loyalty program so they can benefit from faster or free delivery and 31% would pay a monthly fee to get unlimited next-day deliveries.
Amazon’s free two-day shipping for its Prime members is hard to beat, but don’t forget that those members were willing to pay for the service. If you can offer a similar value proposition, your shoppers will likely choose your store over others that do not offer this type of program.
Things to Consider:
Before diving into a new fulfillment and delivery strategy, first analyze your customers’ shopping behavior to determine what they want. If you have a CRM, there are specific data points you can use to determine which delivery options fit your customers’ needs. The ones that probably come to top of mind are customers’ willingness to pay for shipping, the most used shipping options, and the average delivery time.
Some other data points to look at are the number of returns, AOV, and average number of purchases. These data points will help you determine what your overall objective is with your fulfillment and delivery strategy. Do you want to increase AOV? Decrease the number of returns?
For example, say your current AOV is $75, but you want to increase it to $100. You could offer free shipping for orders over $100 to improve your AOV. The average number of purchases will help you determine who your loyal shoppers are and how to reward them. If the average shopper makes more than two orders in a month, they could get free next-day shipping on their next purchase, or they get a free gift of their choosing included in the next order. As long as it’s something that will incentivize them to make another purchase.
Providing your shoppers with a unique, on-brand delivery experience is key to beating Amazon. Amazon’s user experience is appealing, but its packages and offerings lack the personalization that brands can offer.
If you’d like to discuss optimizing your delivery experience or you’re thinking of replatforming your ecommerce site, feel free to reach out to us here. Blue Acorn iCi provides complete commerce services: technology implementation, marketing, site operations, packaging & logistics, contact center, optimization, and analytics.
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