Retailers Need to Close the Gap on Amazon to Achieve Greater Brand Loyalty

Online behemoth Amazon accounted for nearly half of all 2016 online holiday sales, according to a recent survey from PowerReviews. Amazon’s dominance, especially as far as providing ratings, reviews, and question-and-answer technology has significantly altered the industry landscape and changed shopper expectations.

Retailers can compete against Amazon, the survey noted, by providing relevant content and by using loyalty programs to increase engagement and conversion. The survey found that 71 percent of shoppers make at least one Amazon purchase a month, usually for one of the following reasons: Variety of products; free shipping; better deals, the volume of customer reviews; search capabilities; and mobile experience.

Loyalty360 caught up with some of its members regarding Amazon’s dominance and what retailers can or should do better to compete.

“Amazon has indeed raised the bar and helped set expectations for online consumers, tapping into a clear trend, the desire for utility and ease of doing business with a brand,” Chirpify CEO Chris Teso explained. “As Amazon evolves and grows its offerings for Prime members, the bar continues to rise and the ease of doing business with Amazon grows. Retailers do have the tools to compete but need to start closing the gap quickly. One way to start doing so is to modernize their loyalty programs by rewarding for engagement. Customers understand the value of not just the dollars they spend, but also the value of their time and participation with the brand; they want to be rewarded for their advocacy on behalf of a brand. A value exchange where engagement is rewarded and utility are provided will increase brand loyalty across customer touch points.”

Evan Magliocca, brand marketing manager, Baesman Insights & Marketing, told Loyalty360 that Amazon is, undoubtedly, one of the most innovative ecommerce platforms today.

“That’s something the statistics don’t really show,” Magliocca said. “A major factor that gives Amazon so much trust among customers is a consistent sense of innovation that focuses on the customer, not the brand. If brands can learn anything from this, it’s that they need to be open and innovative. They really need to focus on how they can help the customer, not themselves—even though that seems counterintuitive. Amazon Prime doesn’t make sense from the brand perspective. Why offer free two-day shipping, video, and music storage in one retailer program? It looks like chaos. But, if you look at it from the customer perspective, things look a lot different and a lot more positive. Customers shift to Amazon because they know they put them first. They always have them in mind.”

Stellar Loyalty CEO Kevin Nix offered his perspective on the Amazon Factor.

“There is absolutely no question Amazon and others, like Starbucks and Walmart, have forever changed consumers’ perceptions of what a shopping experience should feel like,” Nix explained. “Time is a precious commodity for today’s busy consumers. By creating frictionless shopping experiences with a huge selection, helpful reviews, one-click ordering, and easy returns, Amazon has given its customers the gift of time and consumers have responded with a resounding ‘amen to that.’ Amazon has also raised loyalty marketing to a new level with Amazon Prime by offering ‘club’-like perks people truly value and enjoy. There’s no going back from here in the consumer’s mind, so retailers of all shapes and sizes need to quickly get on board.”    

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