The elephant in the ever-growing room of online retailing is one of the biggest anywhere – and its name is Amazon. Last year, over 10% of all retail transactions were made over the Internet, and as you can imagine, a large chunk of this is due to purchases made at Amazon.com. In 2015, Amazon sold over $70 billion worth of goods – five times more than its closest online competitor, Walmart.
For the vast majority of retailers in the US, they have no choice but to go online, because that’s where the customers are going. Online sales are expected to grow at least 10% every year – but “going online” could very well mean becoming extinct. Or, alternatively, becoming an Amazon marketplace affiliate.
To avoid either fate, e-retailers need to come up with strategies that get them noticed. The elephant in the web room can do what it wants, of course – but with the steps outlined below, e-retailers have the opportunity to make their mark on the Web, and build up a reputation and following among customers, hopefully getting them to come back again and again:
Focus on customer service: with Amazon being such a major force in e-commerce, one of the best strategies for the 99% who are not blessed with that web address, is to focus on doing what a behemoth can’t – and that is to build as personal a relationship with customers as possible. This could entail anything from using big data to mine information on customers and build up a profile of their preferences, birthdays, and other information that can be used to build a relationship with them, to using chatbots to engage them.
With the latter strategy, sites can offer background sales assistance to customers, just like at retail stores where salespeople can helpfully hover in the background and be available at any time to answer questions, while not aggressively hectoring customers. Turning the personal touch into an advantage is a very feasible goal for e-commerce sites that want to stand out.
Coupons, contests, promotions etc. are all good ways to get attention – but not necessarily a way to stand out. Competing against Amazon on price is absurd, as they have the ability to knock down prices as low as they want. Ditto for shipping: Amazon Prime, which is not free, is seen as a huge bargain in shipping and is considered untouchable by other sites.
But there are other value-added features sites can offer their customers. One unique way to distinguish a site, for example, is to offer interest-free credit card-based installment payments as an online payment option. In this scenario, customers pay for an item not at the time of purchase, but over a select amount of months. Thus, instead of charging a $400 purchase and subjecting themselves to interest payments, they commit to paying off that $400 over the next ten months, in monthly payments of $40 each, no hidden charges. In turn, this online payment solution helps online retailers increase average order value, conversion rate and ultimately online sales.
One Stop Shop
While the largest e-commerce sites spread the net wide and are go-to places to buy almost anything, often, they aren’t positioned as “the experts” on any specific line of items, opening up an opportunity for smaller sites. Whether it’s sweaters, shoes, or catamarans, sites that specialize – and make known their expertise via social media and in promotions – can build a reputation as the go-to place for that particular product.
To draw on a non-Internet example, for the latest high-end runway look, one might go to a Barney’s or Macy’s, but not to Sears. On a mission to buy tools or appliances though, Sears would be the place to go. Sears sells clothing, too, but customers go to the store, or site, with the perceived expertise.
In an era of increased social awareness and political activism, much of it is centered around economic fairness and the domination of society by big players. That activism apparently hasn’t affected Amazon and the other dominant e-commerce sites. Sales there are healthy– but there’s nothing to stop a smaller site from positioning itself as a conscience for a particular cause, turning it into a site that has a reputation for doing the right thing.
This is a strategy that even big companies embrace nowadays: companies from Starbucks to Costco, for example, stress that they sell only fair-trade coffee. Internet retailers who develop the “right” kind of reputation can see often a boost to their business.
The system makes customers feel more in control of their finances, and a recent survey shows that many customers even prefer this option over free shipping. In the same survey, almost half of the consumers polled said that they would be willing to spend more if offered this payment option.
These are just a few ideas among many that will let e-retailers build their own little empire, unassailable by the big sites. The steps outlined here are for the most part unlikely to be adopted by the big sites, but they offer a substantial advantage over the competition, large and small. This holiday season, a little creative thinking – and action – could translate into lots of reputation buzz, and hopefully income buzz, for the Internet’s smartest retailers who are not Amazon.
Gil Don is CEO of Splitit