Amazon and Walmart taking over online shopping, how can you compete?
As an educated consumer, you already know the power of the internet. While you are online, information about you is being gathered either directly (by you typing in your details as part of a purchase for example) or indirectly by being tracked in your behavior. This can actually be a good thing in that more relevant products and content can be tailored to your preferences over time.
As we continue to function more and more in our homes and do most of our activities online, this client data is even more essential to shops, brands, and e-commerce companies. The information drives trends in shopping patterns, what consumers are interested in, where they like to shop, and what products and behaviors they exhibit. This is invaluable information to any e-commerce store and marketing team.
But capturing this data and then knowing what to do with it are not always skills that go hand in hand. Even worse is not being able to even know who your buyers are.
Consider this, as a friend was sheltering in place and looking forward to visiting her family that had a pool, she realized that she needed a new swimsuit. Most stores were closed, and the ones that were open did not allow anyone to try things on. She realized there is a particular style of suit she likes from a company (let’s call it XYZ Co) that she has shopped with before. After doing research on the internet, she found the brand and that particular style, great! But then she was also shown that this exact same swimsuit is $10 cheaper on Amazon and has free shipping. She ended up purchasing it from Amazon.
She is the winner in this transaction, but the XYZ brand is most certainly the loser. This clothing brand has lost much more than direct revenue. It has lost all pertinent information from this customer.
Data has been dubbed “The New Oil” and according to The Economist, Amazon’s share of the US e-commerce market in 2018 was 49%. This is problematic to all direct sellers as Amazon does not share any performance or demographic data with its sellers. And very recently, The Wall Street Journal reported that Amazon used data about independent sellers on the company’s platform to develop competing products. A practice Amazon has stated is against its own policy.
Amazon is notorious for not sharing the demographic and user behavior data to its third party sellers and after the swimsuit transaction, the XYZ has no idea that this person is a loyal shopper, what they purchased, where they are located, or any of their preferences or XYZ’s product browsing habits. So if data is the new oil, how are you digging for it?
Wall Street Analysts such as Jefferies’ Brent Thill, estimate that total e-commerce growth has now reached 14.5% of overall retail sales, up from 11% last year. Amazon, Walmart, and Target are the giants poised to take over and hold the consumer market. Walmart and Target reported record sales in 2nd quarter of 2020. And the data divide among large and small to mid-size companies is getting bigger.
How do you future proof your business?
Data Strategy
Having a solid data strategy is essential in a brand’s future survival. Consider what information you are currently capturing on your site, in your partnerships and affiliate strategies, and your marketing efforts. Knowing your prospects and customers, their buying habits, and their demographic details should be at the forefront of any business, small or large. Ensuring this data is kept up to date, cleansed, and enriched will improve your insights and analytics and drive better and more successful marketing and sales efforts.
Multi-Channel
Ensure that you are growing your sales through multiple channel strategy and focus on branding. Yes Amazon and Walmart are giants and drive the most buyers but consider whether the tradeoff is worth your time and loss of control. A women’s brand we work with, has made the decision to not sell their product on Amazon for lack of data transparency and lack of pricing control. Luxury brands have long been opposed to third party sites and have worked with partners that are willing to have a mutual benefit. Be creative, use social media, your site, and email as starting points to diversify your channels and create your own brand experience.
Marketing Analytics
You have the data and now what? Do not get caught up with frivolous, top level analytics. Dig deeper into your products, audience, and channels by ensuring you are comparing all of your relevant data in one place. Often, brands have multiple reports and systems to sift through to see their numbers, but most of the time the correlation is not there. Invest in a proper Marketing Analytics strategy to see what is working in your omni channel approach. Through your Analytics strategy, you should be focused on figuring out how to increase lifetime value, what your attrition rates are for your customers, and ways to improve your overall ROI.