How retailers can beat Amazon
Did you know that eight out of ten Americans now shop online, and that contributed to more than $2.3 trillion in sales in 2017? A TRILLION. This year, we’re on track to hit $2.8 trillion.
Last year, eCommerce sales accounted for just 9% of the total US retail market, and Amazon grabbed a little less than half of that according to the stats from One Click Retail, producing $200 billion in sales.
Admittedly, I am one of one of many consumers contributing to the success of the ecommerce giant, Amazon. I love the convenience and the personalization they offer me, but people also shop there for the ultra competitive prices and product comparisons.
Amazon has spoiled us by creating high expectations, reshaping our mind-set when it comes to online shopping. Other retailers feel the pressure and may think they can’t compete, but there are actually ways to take advantage of Amazon’s weak spots if you know where to put your resources.
Big and bulky is booming
Consider logistics. More specifically, the logistics of shipping large items remains a black hole for most online merchants. Even Amazon hasn’t been very forthcoming when it comes to their logistics strategy.
That said, online furniture sales are one of the fastest-growing segments for online merchants. This category is on track to grow to $62 billion by 2021 according to eMarketer, which also explains why it is also among the fastest-growing segments on Amazon, up 33% last year.
Yet, delivery of oversized, bulky items is where Amazon falls short. I’d like to see them release a drone that can deliver my new mattress J. Right now, ecommerce sellers of mattresses, treadmills, furniture and other bulky items can still compete logistically.
Until Amazon figures it out, merchants of oversized items can outsell Amazon if they focus on their delivery strategies and marketing efforts to communicate their important differentiators.
Delivery is complicated
When consumers order a piece of furniture, it’s not uncommon for the piece to change hands up to eight times, and take at least six weeks to arrive. I can relate, as I’ve received my fair share of damaged furniture from brick-and-mortar stores.
Most sellers must turn to existing traditional carrier networks, which always come with extra fees. Those fees either increase the consumer cost or the seller has to eat them. Believe me, shipping is never free, but we’ve been conditioned to think it should be.
It gets tricky without volume to command a competitive shipping rate, but here is where technology can help: Using big data, it is possible to closely track delivery rates (kinda how people track the stock market). That data can help sellers know ahead of time how much it will cost to ship a bulky item. Obtaining fixed-rate pricing is possible, and if the right partners are enlisted, the price can even include insurance.
Traditional carriers do not like residential deliveries because of the risk of taking a large truck into residential areas with tight streets, low-hanging barriers, etc. The key is for sellers to find or build an excellent network of trusted transporters to provide as few “touches” as possible. This can be accomplished with companies who offer smaller transport options like Sprinter vans and pick-ups with trailers, or by taking advantage of underutilized truck space.
Unfortunately, carrier truck lines do not operate under the same speed and low-cost philosophy as Amazon. However, sellers should make it their goal to ensure that carrier slow delivery timeframes do not tarnish their reputation. The last thing anyone wants is a bad online review due to the delivery method.
The best solution is to find a way to offer customers a fixed-rate shipping option that includes insurance, a vetted transport network and tracking notifications for the utmost transparency. Easier said than done, I know. But there is proof it will grow ecommerce sales.
It all boils down to technology. Online merchants that use it to their advantage will see faster customer deliveries, bigger bottom lines, and establish trust with buyers who will keep coming back for more.