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Ecommerce Marketing Amazon

Why Amazon’s dominance over e-commerce may not be as complete as it seems

By Graham Cooke, CEO

August 23, 2017 | 5 min read

Nothing better highlights the threat to brands than Amazon recently shrugging off a steep profit drop in the same week it announced recruitment drives, massive expansions to its R&D arm and its first major TV sports deal.

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Amazon is the seemingly unstoppable machine, capable of shrugging off poor financial results while still expanding. You'd be forgiven for questioning how other brands can possibly compete.

Yet, despite outward appearances, Amazon does have a weakness – it’s simply too big to provide an engaging product discovery phase. If you know what you want, it's ideal – but otherwise, the Amazon experience, in all its enormity, can resemble wandering aimlessly through a giant warehouse. While recent tool Amazon Spark may go some way to addressing this, rollout continues to be limited to not using existing customer data and app only.

The likes of Asos are already leveraging tech to make their own discovery phase more seamless, but there’s more room for brands to excel significantly here.

For retailers, knowing which tech to leverage can often be the difficult part. With such a wide variety of martech toolkits to choose from, and many vendors keen to inflate their own success in order to make a sale, a significant degree of murkiness has so far prevented brands from identifying what definitely works and what is a waste of time.

Qubit recently analysed more than 2bn online customer journeys to provide a definitive ranking of the 28 most commonly used ecommerce techniques, working with PwC to verify the methodology.

The aim was to clearly identify which techniques work, call out those which have lost effectiveness, and name and shame those which negatively impact revenue. But we also verified our suspicion that those brands that can efficiently help customers discover the right products can in fact carve out and maintain their own market share – and that Amazon’s dominance over e-commerce is not as complete as it seems.

Substance trumps style

So firstly, what doesn’t work? The research found that the more cosmetic tactics are clearly no longer turning the dial for consumers.

Techniques like playing with the design of buttons or navigation was marketers’ first introduction to website optimisation, but these cosmetic tweaks have not only hit an effectiveness ceiling, they’re actually negatively affecting revenue per customer.

When any business can build and maintain a website, functionality and aesthetics are no longer enough. You need to serve your customer what they want – help them discover what they need, sometimes even before they know it – as soon as they land on your page.

Persuasive experiences – those that provided a purchase impetus and surfaced products to a customer based on behaviour – were found to have the greatest impact in driving up revenue per visitor. Crucially, those techniques that assisted customers in product discovery, personalising the product range displayed to each customer, were the top performers.

For example, social proof – harnessing the real-time behaviour of similar users to draw attention to trending or popular items – resulted in 2.3% revenue uplift. Meanwhile, leveraging scarcity or urgency techniques – such as highlighting items with limited stock, or specific product offers that will soon end – resulted in rises of 2.9% and 1.5% respectively.

These may not sound like big numbers, but remember that this is revenue per visitor. By combining these techniques together, and applying targeted segmentation to deliver the best-ranked experiences to those customers proven to respond best, brands can expect an uplift in revenue of 6% – potentially worth billions to the wider e-commerce industry.

Vendors must play their part

It’s clear that by displaying items that are popular with a target customer demographic, and personalising recommendations based on previous behaviourial data, brands are able to drive up their earnings by helping visitors find the items that appeal to them. This is the area where Amazon falls down, and it could be where brands are able to mount a challenge to a seemingly relentless beast.

Yet vendors must play their own part here and provide more honest assessments of their own tech's effectiveness, or risk losing their client base forever.

Today’s environment is more competitive than ever: almost three quarters of online consumers surveyed by Qubit spend most of their money on just one to five websites, while 81% would consider switching loyalty to sites that provide a more personalised service. Brands simply cannot afford to let consumers walk out the door without displaying the products they may want to purchase, and marketing tech vendors can’t afford to let their clients believe that substandard tools will help them compete.

The findings from this report should nudge other vendors into being more open about their own tech, and encourage brands investing in this tech to demand a higher standard of proof of product. But ultimately, this report should help the wider industry recognise that there are opportunities to not just survive Amazon, but excel in areas it cannot.

Graham Cooke is chief executive of Qubit

Ecommerce Marketing Amazon

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