What Retailers Can Do To Beat Amazon

Author

Richard Kestenbaum

February 20, 2017

Every month, more people visit Amazon than visit their families. And why not? Your family doesn’t have 200 million items for sale at reasonable prices, including 5 million clothing products and 20 million sporting goods products. And Amazon will never disapprove of your lifestyle. So how do you compete against that? What do you do if you’re a retailer facing Amazon as a competitor?

A new report by Power Reviews addresses that question. They interviewed 1,000 consumers across the country in every major demographic group and here’s what they found:

Product Descriptions Are A Problem

The number one frustration customers have with online purchases is that the product description isn’t accurate. Not only does it frustrate the consumer but it leads to frustration for the retailer because it creates higher returns. One great credibility builder is having product descriptions and pictures on your site from consumers. TripAdvisor does a good job of this. When they show you a hotel, they include pictures that the hotel has posted but they also include pictures that consumers have taken and posted on TripAdvisor. It’s a real confidence-builder. Not having product descriptions that are detailed enough drives consumers to Amazon because they trust Amazon and they know they can return it hassle-free.

Include Reviews, And Don’t Leave Out The Bad Stuff

Kim Jong-un, the leader of North Korea, was elected in 2014 with 100% approval by the voters. If your ratings are as high as his, they are probably just as believable. Consumers want to believe good news but news that’s too uniformly good is suspicious.  If reviews aren’t believable, it’s a trust destroyer and that drives consumers away. In the study, 82% of consumers looking at reviews sought out the bad reviews. Consumers reported that the ideal rating isn’t 5 out of 5, it’s between 4.2 and 4.5. If there’s no bad news about you, you’re either suppressing the truth or no one’s bought anything.

Reward Loyalty

You won’t build loyalty with a point-based or dollar-based loyalty program. You build loyalty by treating customers with respect and solving their problems. But if you have customers’ loyalty, it needs to be rewarded.  Loyal customers will give you your best reviews and that will enhance their loyalty and drive other customers to your site.

Another report by Cowen and Company that was distributed at the recent ICR Conference in Orlando described focus group findings. In the Cowen study, consumers indicated they preferred Amazon when they knew exactly what they wanted and were familiar with the particular product. But Amazon was weaker when consumers wanted to browse or wanted guidance in curation and of course when they wanted to try products on. It is probably with regard to navigation and curation that consumers in the Cowen study also said that Amazon was weaker in site personalization. The Cowen study also pointed out that brands with real market power don’t have to succumb to the force of Amazon.

Amazon is very powerful but its power can still be repelled by great in-store experiences, brands not available on Amazon, and customer service including detailed product descriptions and reviews. Over time of course Amazon will adapt and retailers’ flexibility to find new ways to fight back will be critical to survival.

 

This article was written by Richard Kestenbaum from Forbes and was legally licensed through the NewsCred publisher network.

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