Amazon has spent much of the past two decades teaching us how to shop. Their website, mobile apps, product content, shipping deals and customer service have created high expectations in shoppers’ minds that everybody has to live up to.
That reality hits home in What Buyers Want — a DMI Consumer Survey, which polled more than 1,500 U.S. adults to get to the roots of shopping behaviors in an era of massive retail disruption. It’s become popular to implicate Amazon in the “retail apocalypse” that’s shutting down thousands of legacy retail stores. But when we asked people to name all the places where they purchased something in the past month, 88% of their responses named physical stores, versus 59% for websites and 38% for retailers’ mobile apps.
Moreover, while Amazon nets about half of all online sales in the U.S., according to Chain Store Age, they get only about 5% of total retail sales. Thus, it’s fair to say there’s nothing to fear from Amazon. Indeed, retailers are better off thinking about what they can learn from Amazon’s success. Can they take advantage of the behaviors that Amazon encourages in online shoppers? And could those experiences ever bleed to in-store experiences?
Survey Reveals Amazon’s Impact
Amazon’s influence left footprints throughout DMI’s report. For instance:
- The Prime effect. When we sifted the survey data, we found that Prime members were 44% more likely to shop in-store at least weekly and 86% more likely to use a mobile device in-store. Thus, Prime membership signals a more active shopper profile in both digital and in-store, though their high digital engagement is most significant.
- Blending online and in-store. 58% of our survey respondents had used a smartphone in a physical store to help find a product, learn more about it or make the purchase. Also, 51% of survey responses cited buying or reserving an item online and picking it up in-store or curbside. Amazon’s pervasive online presence is a crucial enabler of these behaviors.
- Sunset for the desktop? Our survey responses suggested that desktop computers are becoming less relevant to online commerce. The survey’s rankings for best shopping experience when making a purchase look like this: 47% in-store, 28% desktop, 24% mobile. Combining the in-store and mobile votes (71%) reveals that people prefer them by a margin of 2.5-to-1 over desktop computers. Amazon’s influence on in-store mobile device usage is undoubtedly reinforcing these preferences.
What Amazon Does Best
Making Shopping Easy
Mobile is the preferred channel for browsing, over in-store and desktop. However, mobile doesn’t get the conversion of other channels because it’s often a clumsy experience. Among Amazon Prime shoppers, 44% have made purchases via mobile applications vs. 30% among non-Amazon Prime Members — that’s a jump of 46%, suggesting that when consumers have a frictionless mobile channel, they convert at higher rates.
And it’s not just mobile applications. Responsive web can also be improved for easier, faster retail experiences, especially at checkout. When asked what retailers could do to secure more of their purchases, 14% of all survey respondents selected “faster checkout,” over other options like more loyalty points or exclusive discounts, indicating faster checkout has real nominal value to them.
Encouraging User Accounts
A common reason why shoppers continue to return to Amazon: all of their information is there already, from addresses to payment methods. This serves as a lesson to retailers to improve the process of account creation and use. In our survey, only one in four shoppers say they always use or create an account when making a purchase online, while one in five say they never create accounts. The biggest reasons for not authenticating: 32% don’t because they don’t want to receive marketing emails and 22% because it takes too long. If retailers better explain marketing practices and make the account creation process faster, they can secure more than half of lost purchases in the critical moment of authentication.
Turning Free Shipping into a Loyalty Program
We wanted to understand what retailers could do to earn more transactions from consumers. The answer, again, led us back to Amazon. Free shipping (33%) outperformed earning rewards (23%), and when coupled with guaranteed delivery and hassle-free returns, shipping represented nearly half of loyalty driving preference. When retailers consider all the effort and resources invested in costly loyalty programs, they should ask if those programs are truly driving loyalty and subsequent purchase, or if that investment would be better spent in shipping and delivery.
All retailers want to know what they should do about Amazon. You don’t have to fear them. In fact, Amazon may be on your side in encouraging more frequent shoppers in both digital and in-store. Instead, embrace the expectations Amazon has created with customers. If you can be at parity where it matters most — specifically around ease and delivery — you may not only protect but grow your market share against Amazon.
Taking these lessons to heart just might be the best way to keep your customers out of Amazon’s clutches.
— Paula Moniz, director of strategy & customer experience