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5 Ways Ecommerce Retailers Can Compete and Win in the Amazon Era

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“The everything store”, Amazon, has reached new levels for what was already the third largest company in the world. With nearly 100 billion dollars in quarterly sales and more than 12 million products (not even including those on Amazon Marketplace), it can seem nearly impossible to compete alongside this giant. But we can learn a lot from Amazon’s playbook and ecommerce retailers of any size can apply these lessons, even turn Amazon’s size into a disadvantage, and ultimately win and keep more customers.

Let’s dive into five lessons from Amazon’s playbook any ecommerce retailer can employ to win in this hyper-competitive ecommerce marketplace.

This article includes excerpts from our ebook, 5 Ways to Compete in the Age of Amazon. Download the full guide here.

1. Fulfillment

When Amazon debuted its Prime membership, two-day shipping was unheard of and free two-day shipping was almost unbelievable. But Amazon set a new standard, guaranteeing free and fast shipping for almost every product. The company was able to reduce shipping times by placing unprecedented investment in supply chain organization and technology.

Now, customers expect fast shipping38% of shoppers will abandon their carts if delivery will take longer than 1 week, and 24% of shoppers say they would abandon if no delivery date is provided. So it’s clear that, to compete, ecommerce companies need to streamline and speed up fulfillment wherever they can. Whether you handle fulfillment all in-house or use a platform like Shopify Fulfillment to streamline these operations, faster—and cheaper—shipping yields fewer abandoned carts, increased revenue, and high customer satisfaction.

2. Consumer Financing

More than one-third of US ecommerce brands plan to add new financing options to their stores in the next 12 to 24 months, on top of the 32,000+ merchants already offering it. Offering creative solutions to financing a purchase allows retailers to increase conversion rates and help customers follow through with their desired purchases. Amazon already offers a few solutions in this department, but fintech partners in this space are just as accessible to any retailer.

From fixed-interest financing options like those provided by Affirm, to payment installment options like those from Klarna, to even providing a cash payment option such as with Paypal Cash, payment flexibility can have a significant impact on conversion as it gives more purchasing power to consumers. For example, Affirm has seen average order value for retailers grow by 92% and conversions increase by 20%. A huge percentage of shoppers are looking for this type of flexibility, including nearly 100 million consumers who have already transacted with Klarna. And don’t forget about the 25% of US households that are unbanked or underserved by banks, seeking to pay cash for transactions. For retailers that can offer this payment flexibility, they can truly win over more customers.

3. Personalized Recommendations

When done right, recommendation engines can be a powerful tool for retailers. One study found that when shoppers engage with even a single recommendation, average order value (AOV) increases by 369%. In today’s retail environment, product recommendations account for up to 31% of ecommerce site revenue. The question is: how can retailers better leverage recommendations? 

Amazon of course has a wealth of shopping data to pull from to offer personalized recommendations. But don’t discount the data you have, and make sure to put it to work for you, whether that’s data from your store or broader consumer trends. If you don’t have the technical resources in-house to make this happen, consider some of the tech platforms out there, like Barilliance or Nosto, to turn data into personalized consumer recommendations. Or even go for the simple, low-tech approach: something as basic as recommending your top-sellers on other product pages can give you some of the value that comes from product recommendations.

4. Customer Care

One study found that more than seven in ten US consumers (70%) report that they have made purchasing decisions based on the quality of customer service. Consumers value customer experience so highly that even if they love a company or product, 76% will walk away after several bad experiences, and 61% will walk away after just one bad experience. Customer care is one area where bigger isn’t necessarily always better. Independent retailers can often achieve stronger, more personal customer interactions, even without the global scale of Amazon.

Chewy is a great example of how customer service can make a difference when competing against a giant like Amazon. With every interaction, they aim to go above and beyond to delight the customer. This comes down to great policies, such as 24/7 support, a 365-day refund window, and even offering special care for special circumstances.

A great example of this took place when a customer tried to return a bag of dog food after his pug had passed away. Instead of an automated email with instructions on how to return the food, he received a package from Chewy containing a pet portrait and a handwritten note letting him know they would refund his purchase, and that he should donate the unused food to an animal shelter. Chewy is the gold standard for ecommerce retail customer care in many ways, and a good brand to emulate if you're looking to take your customer service to the next level.

5. Product Protection Options

Perhaps the simplest and most impactful way to compete in the Amazon era is to offer extended warranty options. Customers are increasingly looking for product protection—in fact, we’ve seen attachment rates upwards of 20% depending on product category and offer placement. In some cases, customers may voice their desire for a retailer to offer product protection. But more often than not, they’ll simply turn to someone else to get the product—with coverage—that they want.

Amazon already offers the option to purchase product protection for select products, such as electronics. If you compete with them in those categories, or even sell your own covered products on Amazon, offering extended warranties is table stakes to win over customers. And if you offer products available on Amazon but without a protection plan, you have a unique opportunity to offer differentiated value to consumers buying directly from your website.

When retailers offer extended warranties, they also benefit from significant revenue growth. This growth is due to increased conversion rates from cautious shoppers, higher margins and order values because of the added protection plan purchases, and even more and repeat purchases due to greater shopper confidence. And when you partner with a product protection company, you can get up and running quickly and leverage a team of experts to both setup your program and service your customers without impact on your internal teams.

Applying Top Tactics to Compete with Amazon 

From fulfillment to personalization to product protection, Amazon has often been at the forefront of implementing customer-centric revenue drivers. But that doesn’t hold back other retailers from taking advantage of these same strategies. Ultimately, being nimble in the face of a big competitor can often be a retailer’s best asset. As customer behaviors continue to shift, so can your strategies to convert, delight, and retain them.


Is your business looking to offer product protection? Partner with Mulberry


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Ellie Mirman

About the author

Ellie Mirman has over a decade of experience building and scaling marketing at high-growth tech companies, including HubSpot and Toast. When she's not digging into the latest ecommerce trends, you can find her in the kitchen trying out a new cookie recipe.

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