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The burden and inspiration of Amazon Prime

June 21, 2016 01:10 PM
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Amazon.com Inc. is top of mind for nearly every retailer that sells online, whether as a competitor or as the company that helps it sell and fulfill orders; often Amazon is both at the same time.

How to compete and deal with Amazon, especially its two-day delivery through Prime, worked its way into many sessions at the 2016 Internet Retailer Conference & Exhibition earlier this month in Chicago— even those not in the Amazon & Me Workshop. Amazon Prime is a $99-a-year service that gives customers product shipping and streaming video and music at no additional cost.

Marc Lobliner, chief marketing officer for nutritional supplements e-retailer Tiger Fitness Inc., No. 716 in the Internet Retailer 2016 Second 500 Guide, detailed his approach to using several social media platforms to connect with potential customers and create a dialogue with shoppers in ways he thinks Amazon cannot. Amazon is No. 1 in the Internet Retailer 2016 Top 500 Guide.

Tiger Fitness, with limited staff and resources, used original content, such as YouTube videos where Lobliner is a very enthusiastic spokesman. He also encourages fellow fitness enthusiasts to share tips and strategies on Twitter, along with personal stories about detailing fitness milestones, struggles or goals.  Tiger Fitness’s YouTube videos focus on interests of other fitness enthusiasts, and Lobliner includes personal notes inside customers’ shipments. The personal note is a hit with customers and a touch that small businesses cannot underestimate when looking to create and improve customer loyalty.

But small and midsize retailers may not be able to compete with the expedited shipping and lower prices Amazon Prime customers expect, Terri Hunsinger, partner at WebUndies.com LLC (No. 994), told IRCE attendees during the “Small But Mighty Track.” That session aimed to show how smaller retailers can achieve profitability in the face of extreme competition.

Hunsinger and her sister, also part of the WebUndies team, have daily conversations about what SKUs to carry or discontinue. “If one of our shoppers can go to Amazon and buy a Disney Princess nightgown for less money and free shipping, we can’t compete with that so why would we carry that same item?” she said. Smaller retailers would be wise to concentrate on unique products that set them apart from rivals and to leverage personal touches that larger companies may not provide.

Retailers also regularly evaluate  fulfillment and shipping strategies,  how they compare with Prime, and how they can keep customers happy.

Two years ago Rory Hudson, vice president of information and technology of sports equipment and apparel retailer Zumiez Inc. (No. 220), and David Potts, CEO and founder at order management vendor SalesWarp, met for the first time at IRCE. In June 2015, they were in the process of setting up the software and connecting all their systems to make fulfill from store possible and by IRCE 2016 they were presenting about fulfilling web orders from stores.

What a difference a year makes. Zumiez now fulfills 100% of orders from its 668 stores after shuttering its centralized web fulfillment distribution center in the fourth quarter 2015. This operational change has cut delivery time because customers now get their orders from the closest Zumiez location rather than a distribution center hundreds of miles away.  Store staff often write a personal note and include it in the package. Hudson said one store employee noticed that an online order was from a customer who lived close to his home, he personally delivered the package on his way home from work.

Amazon and other big retailers don’t offer that level of personal service, and retailers that find such differentiators can help them grow.

 

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