E-commerce giant Amazon is definitely changing the way consumers are acting and shopping. One of the biggest evidence is that it leads to 37 per cent of all online spend going through the marketplace.
New research from Salmon suggested this spend is set to rise. Around 73 per cent of consumers are saying they will increase their online shopping in the future. And the most intriguing results are about the use of Amazon. More than 53 per cent told they are more likely to buy through Amazon Prime than a retailer’s e-commerce store.
Why does it happen? The answer lies in the one very important Amazon service that fulfills consumer expectations of shopping online – quick delivery. The research from Salmon suggested that 60 per cent of the 6,000 consumers surveyed from the United Kingdom (UK), United States (US), Belgium and Netherlands believe all online retailers should offer same-day delivery.
“Retailers need to consider a balanced strategy on how they compete or collaborate with Amazon. Amazon has seized the day. Put simply, they fulfill their customers’ expectations better than most other retailers in the market,” said Hugh Fletcher, global head of consultancy and innovation at Salmon.
“As consumers increasingly look to service, speed and convenience – rather than brand – Amazon sets the standard that others must follow or risk being locked out. The whole Prime premise is built around providing a same-day or next-day delivery,” he told.
“Amazon has even created its own market peaks with its Amazon Prime Day. We call this “proactive peak formation”. Its purpose is to encourage Prime membership and keep customers ordering exclusively through Amazon and away from other brands. With companies like Tesco launching their own one-hour delivery service, we’re seeing other retailers looking to halt Amazon’s dominance.” Mr Fletcher continued.
It is known that Amazon launches its Amazon Prime Day to attract millions of consumers this week, as well as money off its own range of Amazon Echo products.
(Prime Day is a one-day-only global shopping event exclusively for Prime members. With thousands of amazing deals worldwide, members get exclusive access to the biggest discounts on things they need, things they want and everything in between – across nearly every product category.)
Salmon’s research stated, 60 per cent of consumers would be likely to spend more if a retailer was more digitally innovative.
Moreover, 42 per cent of consumers would like to shop with Amazon Echo (Alexa) and are either currently using or planning to use an Amazon Dash button in their home over the next year.
(Amazon Dash Button is a Wi-Fi-connected device that reorders your selected product with the press of a button. Each Dash Button is paired with an item of your choice, which is selected during the setup process.)
“Amazon is seemingly always ten steps ahead of other retailers, and its continued expansion into other markets demonstrates its intent to sew up every industry in sight. Retailers must ask themselves, are they happy to give up their interface, their data, their customer, and their future, and become just another brand consigned to history? Or will retailers revolutionise their own offerings to combat the likes of Amazon and secure their futures?” Mr Fletcher explained.
Amazon leaves its rivals way behind in top-line growth and the superlative revenue growth is the basis for its strong profit numbers. This retailer alone is worth $356 billion, making it one of the largest companies by market capitalization in the world. If other retailers want to reach similar achievements, they need to work way harder and to be ready for innovations.