Could Amazon’s advantage also cause its downfall? SmarterHQ has released “The Amazon Report: Consumers Share How Brands Can Win Them Back,” detailing Amazon’s potential weaknesses — namely its complementary two-day shipping policy. The research found that should Amazon cancel the policy, an overwhelming majority of its users would cancel their Amazon Prime memberships.
“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, chief executive officer 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 that they would cancel their membership if it wasn’t offered.”
SmarterHQ surveyed more than 1,200 people between the ages of 18 and 65 to understand their consumer behavior specific to Amazon. It found that 82 percent of Amazon Prime users said they would cancel their membership without free two-day shipping.
The survey results confirmed that consumers tend to visit Amazon for purely transactional purchases, which marks opportunity for luxury retailers and brands. “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,” Osborne continued. The survey found that between 37 and 57 percent of Amazon shoppers are buying electronics, books, movies and leisure products such as toys.
Though it seems unlikely that Amazon Prime will cancel its shipping policy, retailers and brands might not need to mirror its delivery services. Instead, heightening personalization features, specifically in marketing messages. If consumer outreach does not extend customized product suggestions based off past purchases, 47 percent of shoppers said they would go directly to Amazon, which sends personalized item reminders and suggestions.
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