As the largest online retailer in the world, Amazon has made a substantial impact on eCommerce. Once an online bookstore, Amazon has evolved tremendously through the years and is now a billion-dollar corporation known for vast product offerings and fast two-day shipping. But how has this online marketplace impacted customer shipping expectations for other businesses? In short, shipping expectations are higher than ever before. Customers can order a product online and receive it at their front door the same day via Amazon. Receiving a delivery within 12 hours, along with millions of product offerings, has altered the way consumers shop, impacting the success of physical retail stores everywhere. This is known as the Amazon Effect.
This blog will delve deep into what exactly the Amazon effect is, how it has changed customer shipping expectations, and how you can help your business remain relevant in a competitive world.
What is the Amazon Effect?
The “Amazon Effect” refers to the impact Amazon has made on traditional brick-and-mortar businesses and the profound changes it has made to consumer behavior and shipping expectations today. For many years, Amazon operated as a small online bookstore, with college students as the prime target market. Officially founded on July 5, 1994, by Jeff Bezos, Amazon did not initially see a significant profit in online sales. It wasn’t until Bezos expanded product offerings beyond books in 1998 that Amazon saw exponential growth, driving the well-known shipping offering we know today: Amazon Prime.
With Amazon Prime, shoppers can purchase and receive items in as little as two days for $79 a year at its start. Receiving items in as little as two days, and in some cases the same day, was a concept many customers were unfamiliar with at the time. But Amazon Prime was the key driver in Amazon’s success, along with added offerings like subscription services, Amazon Video, and expansive product offerings. Now, Amazon offers everything from books, clothing, technical equipment, and even groceries with Amazon Fresh – an online and in-person grocery store.
The quantity of product offerings paired with fast delivery speeds brings in millions of users and billions of dollars in revenue daily. Its reign of success changed consumer behavior and expectations towards shopping online and the anticipated delivery speeds that correspond. And the impact is substantial.
The impact of customer shipping expectations since the rise of Amazon
Recent research from the Retail Industry Leaders Association (RILA) found that 90% of consumers expect their shipments to arrive within 2-3 days, while 30% expect same-day delivery. The growth of eCommerce and digital shopping experiences drove these astounding results, as Amazon and other online delivery services gained further popularity in 2020 with the COVID-19 pandemic driving consumers to remain inside to adhere to health regulations.
With many store closures, delivery services like DoorDash, Instacart, and, of course, Amazon took center stage during the pandemic, enhancing customer expectations to receive essential items without having to leave the comfort of their homes.
With such striking advances, businesses may be concerned with how to keep up with these fast-growing innovations.
The fate of eCommerce: How retailers can counter the Amazon Effect
eCommerce retail sales are projected to grow, reaching trillions of dollars in the years to come. According to Forbes, economists found that 24% of retail purchases are expected to occur online by 2026. Currently, Amazon accounts for nearly 40% of purchases made online, holding 37.8% market share, with Walmart and eBay closing in next. With eCommerce sales and expectations rising, online and retailers must consider ways to counter the Amazon effect to stay relevant in an increasingly competitive market.
Here are some ideas to help retailers remain relevant against big name marketplaces.
1. Do Not Neglect Personalization Efforts
A key driver in online sales is online personalization efforts. Imagine shopping in person at a retail store for an outfit for an upcoming event. More often than not, a retail associate is there to help you choose items and encourage other enticing options as an upselling opportunity. Now, take this scenario and move it online. Upon clicking on an item, consumers are presented with ads or suggested items to purchase without having to navigate the rest of the website for other appealing options.
Customers have come to expect personalized ads and product recommendations based on their buying habits – a tactic Amazon has mastered through social media and other outlets. How is this done? Consumer buying trends are gathered using advanced algorithms and Artificial Intelligence (AI) to collect consumer data to offer customers recommended products based on past buying behavior. These efforts enhance the customer experience, encouraging more sales.
2. Offer Promotions and Discounts via Email or Text
If there’s one thing that drives consumers to make a purchase, it’s an appealing offer or temporary sale that helps mark down the price. While Amazon does offer subscribe and save options and other click-to-save possibilities, in-store sales combined with online promotions are what is helping keep many physical stores afloat.
Take Kohls, a U.S. omnichannel retailer. Their shipping rates are not notable to many shoppers, but what drives their sales year over year is the consistent coupon offerings via text message and email, along with “Kohl’s cash” incentives, which is fictional money that can be used towards other purchases at Kohls.
Further, the American retailer found success with online orders by offering pick-up in-store options, driving consumers to engage in digital offerings but still visit the physical location, presenting further options to shop both online and in person.
Companies can take advantage of mobile technology by creating a seamless mobile experience so consumers can shop online right from their mobile devices while also applying coupons in the process.
3. Offer Various Shipping Options
Shipping expectations are undeniably a key factor in the Amazon Effect. Whether shopping from the United States or across the country in Europe, consumers want their items fast and at an affordable price. Consider offering multiple shipping options for your customers to choose from with the option to ship items in bulk to save on additional packaging costs. If a consumer is genuinely intrigued by your products, they won’t mind waiting for them, as long as you provide reliable tracking services and high-quality customer service in the process. This is especially true for international shipping, as the process can be lengthy with customs duties and supply chain delays involved in the intricate process.
4. Prioritize Customer Service in Your Business Model
While customer shipping expectations have increased exponentially with the rise of Amazon, it’s essential to strive to meet those expectations, regardless of your business size. While offering several shipping options creates various options for shoppers, offering a highly-skilled team of customer service experts readily available to address issues like delays, lost packages, or returns, creates a frictionless experience. Customers will forgive a bad experience if the customer service team is exceptional; however, if a package is delayed and a customer receives no support, it could be detrimental to your business.
5. Understand What Amazon Lacks
Amazon offers countless products with unquestionably fast shipping speeds that have changed how consumers shop and anticipate deliveries. But if there is one thing Amazon lacks is an overall personalized experience with expert knowledge and advice regarding shipping procedures and policies.
In an increasingly digital world, many online collaborations lack personalized interactions that put the customer first. In many cases, if a customer needs to make a return from an Amazon purchase, Amazon will refund the dollar amount without an apology or information regarding how to purchase the correct product or when you’ll receive it. Often, a customer will need to contact a third-party seller, which could take days to receive a response.
Traditional retailers understand what it takes to provide a quality customer experience that larger marketplaces fail to provide.
Meeting consumer expectations with ePost Global
At ePost Global, we prioritize your eCommerce needs so you can have the shipping experience you deserve that is unmatched in the industry. We have deep industry knowledge of local and international regulations so that you can feel secure in shipping within the U.S. to Canada, the United Kingdom, or beyond. Our primary objective is to ensure a smooth and stress-free shipping process that you have come to expect.
We also offer robust technology advances so customers can track their packages in near real-time, offering transparency and honesty. We set these expectations from the time you start working with us to the moment your shipments safely reach their intended destinations. And while it’s important to prioritize fast shipping speeds to meet consumer expectations, unlike Amazon, we emphasize the importance of quality over quantity, while also ensuring speed of service. So, our customers can receive their deliveries packaged with the utmost care fast and efficiently.
We also recognize the distinctive shipping demands of each business. To meet your personalized shipping needs, we offer an array of flexible shipping solutions like Expedited Parcel, Priority Parcel with Delivery Confirmation, ePacket and Priority Mail among others. Our shipping options are diverse, encompassing transparent costs, adaptable delivery schedules, competitive rates, and international customs form expertise.
With ePost Global, you can choose from a variety of shipping options that perfectly align with your business objectives and preferences. So, when trying to keep up with the high expectations of Amazon, you can ensure that your shipment arrives on time with a team of experts ready to handle any problems that may arise in the process.
While there are many positive benefits to Amazon and its impact on eCommerce, its cold demeanor and lack of compassionate customer support representatives leaves many shipping providers in an excellent position to maintain a client base.
If you’re ready to counter the Amazon Effect and start shipping with confidence, contact us. We’ll help you get started.