Amazon is the giant in the e-commerce space. They have 44% of the U.S. market, generating almost $80 billion in the last quarter of 2019 alone.
Those numbers dwarf the sales of other big players like Walmart and Target.
Retailers who want to compete against Amazon have two options. They can provide a better deal, like with lower prices and free shipping. Or they can provide a better experience.
Consider Amazon’s huge economies of scale. They have over 100 million paid Prime subscribers, major stakes in industries like books and consumer goods, and their own product lines across categories. An individual retailer is unlikely to beat them on price. And unless retailers have the patience and the pockets to wait 14+ years to make a profit, which is as long as it took Amazon to get out of the red thanks to expensive policies like its free shipping, they’re unlikely to offer a better deal.
But there is good news for smaller-than-Amazon retailers: you can compete—and win—on customer experience.
Provide excellent customer service
The stakes are high when it comes to treating your customers right.
Good experience can turn one-time customers into lifelong supporters. 84% of customers say they’d go out of their way to spend more money with a company that provided great service.
But bad experiences leave lasting impressions, too. A 2017 McKinsey study found that 25% of customers will defect after only one bad experience.
Excellent customer service can look like:
- Enabling customers to solve issues themselves with well-designed digital tools. 86% of consumers want to use self-service tools for easy issues like reordering (instead of having to talk to someone).
- Having actual human beings available to help for stickier issues. The number one thing consumers look for in great service is access to help agents with the knowledge and authority to help with complex issues.
- Offering generous return policies and addressing any product issues immediately.
Take furniture company Article as an example. They provide excellent customer service with their:
- Easy-to-find contact options right at the top of their website, so customers with an issue can immediately live chat or call a customer service rep.
- “Accessibility” tab at the top of their site that connects customers with disabilities to a dedicated accessibility phone line.
- Comprehensive and well-written FAQ page. It answers customer questions like “what do you recommend for families with young children?”, letting customers self-solve common problems.
- Clear and generous policies on returns and exchanges, including a 30-day satisfaction guarantee.
Customers are busy. Retailers that meet customers where they are and make it easy to find what they need consistently come out on top.
97% of consumers have backed out of making a purchase because it wasn’t convenient.
Here are some examples of what customers consider convenient:
- Providing subscription options that allow them to get regular shipments of household staples.
- Showing reviews directly on the product page so customers can investigate a purchase without going off-site
- Having simple check-out processes with minimal steps to save time.
- Offering extended warranties to give customers peace of mind long after they’ve made their purchase.
Look at kitchen goods company Balmuda and how they provide customer-focused convenience through:
- Built-in reviews page that displays real customer feedback directly under the products
- Clear checkout page that lets customers see the three steps—inputting address, adding payment details, and confirming order—that they need to complete as they’re checking out
- Partnership with Clyde to offer easy-to-navigate, affordable extended warranties and accident protection
One of the major benefits of being a smaller retailer is the ability to provide an extra touch to your product or service that is impossible to do on a huge scale.
Giving a bonus to your customers is an example of reciprocity marketing. It’s based on the psychological principle that people are more likely to be loyal to a brand or company when they feel like they’ve gotten something extra in return.
These are examples of unique touches:
- Adding extras, like stickers or free samples, to shipments
- Sending handwritten thank-yous after purchases
- Offering surprise post-purchase discounts or exclusives
- Sharing transparency into your production process, like by highlighting workers or organizations supported by a purchase
Beauty company Glossier does this really well by:
- Including free extras in every order, from cute stickers to the now-famous reusable pink bags their products come in
- Surprising loyal customers with extras like bonus product and merch giveaways
You may want to go head-to-head with Amazon and walk away with some of their market share. But lowering your prices or slashing your shipping costs probably won’t get you there. You don’t need flashy Prime shipping to create great experiences for your customers that will let you compete against the big guys. Investing in any of the above differentiating factors should do the trick.
To keep your customers happy and your business competitive, start by investing in excellent customer service with real humans available to quickly solve customer problems.
Next, make your retail experience as convenient as possible with subscriptions, easy check-outs, and thoughtful extended warranty options.
And last, add unique touches wherever you can, whether that’s with packaging inserts, extra discounts, or personalized thank yous.
Great customer experience will only be more important as the future of retail moves more towards e-commerce, particularly as in-person shopping continues to be a health risk. A June 2020 Deloitte report found that online orders grew 130% from 2019 to 2020. What will those numbers look like later this year?
The time to invest in providing a great customer experience is now. What are you waiting for?