Retail bankruptcies have jumped 24% year-over-year and consumers are increasingly favoring online and mobile shopping as retail brands try to ready themselves for the all-important holiday shopping season, and to compete with big name e-retailers such as Amazon. But a report from SmarterHQ shows cracks in Amazon's armor that retail brands can exploit to start stealing market share back from the e-commerce behemoth.
Much of the evolving retail landscape has been widely attributed to the enormous impact of Amazon, which has more than 310 million active shoppers worldwide and some US$136 billion in annual sales in the US alone.
But 'The Amazon Report' survey (of more than 1,200 people ages 18 to 65+) found that without free two-day shipping, 82% of Amazon Prime users said they would simply cancel their membership.
Some of the key survey findings include:
- People really use Amazon to shop for very specific items: 57% of buyers on Amazon are looking for a specific product, and 63% of all shoppers already know what they want before they start shopping. Potential customers aren't browsing Amazon, and they are 25% more likely to purchase branded products from the e-commerce site.
- Without free two-day shipping, Amazon Prime users will cancel their membership: 84% of buyers who had a specific goal in mind also demanded speedy, free shipping. Customers are likely purchasing a retail brand's products on Amazon simply because they have better shipping options.
- Customers will shop with a retail brand more often if they're provided relevant messages based on aggregated shopper data: In a retailer's marketing messages, it's important to include products their customers have engaged with and to suggest new ones based on their customers behaviors. If not, 47% of shoppers are moving from a brand's website and straight to Amazon's with their personalized product reminders and suggestions.
- Customers may seem like die hard Amazon fans, but it's really only a few things that tickle their fancy: Between 37 to 57% of shoppers on Amazon are purchasing electronics, books, movies and leisure products like toys and hobby items. Luxury brands should find this especially comforting; people chose not to purchase products above $200 on Amazon.
"Amazon's dominance in retail has been the primary focus of retail executives, investors, and board members - yet, the solution to steal back both market share and consumers' loyalty have evaded most traditional retail brands," said Michael Osborne, CEO of SmarterHQ. "But our report tells a surprisingly upbeat story for retail brands - consumers can be persuaded to ditch Amazon and shop in their store or on their web site. We found that people aren't going to Amazon to browse; rather, they have very specific items in mind. Free two-day shipping is very important to Amazon Prime members - so much, in fact, that they would cancel their membership if it wasn't offered. And consumers have a price threshold of $200 they're not willing to cross when shopping on Amazon, a good sign for luxury brands. While Amazon is viewed as Goliath by the industry, there are certainly weaknesses that retail brands can exploit to help drive their bottom line."
