Can Retailers Replicate Amazon’s Success?

Amazon has launched many successful products from creating a digital channel to selling books to the ‘one-click’ checkout experience to targeted product recommendations to digital storefronts such as the Appstore, Kindle, Fire etc.  After building a robust base of consumers and merchants, Amazon smartly introduced the Prime service, a subscription service offering free two-day shipping, providing convenience to its customers to continue to spend more money with the retailer.  Prime customers spend almost twice as much as other Amazon shoppers, making these shoppers very valuable to Amazon.

In an attempt to replicate what Amazon has accomplished, many retailers have rushed to offer similar services without considering the unique needs of their customers. These efforts are often unsuccessful and only provide short-term benefits. A more effective approach is to create an experience on top of existing services, to remove customer friction in order to help customers manage their daily lives better. Let’s examine a few:

• A different approach to Same Day Delivery: Create and fulfil shopping lists same day. Same day delivery does not have to be shipping orders to customers the same day. Retailers can benefit from a broader approach to creating an experience that enables customers to easily create a shopping list and get it fulfilled the same day from a physical location. For example, a busy mother creates a shopping list on the go and gets it fulfilled at the store on her way to pick up her children from soccer practice. In this case, the entire experience is around providing “convenience” to the busy mother while making her daily life easier to manage.
• Pay after delivery: Customers order online, receive their orders, inspect them, are satisfied and then pay. The experience can benefit customers in two ways: (1) A short-term interest free loan until they receive the product; (2) Opportunity to touch and test the product before paying. The experience may also save retailers several thousand dollars in returned merchandise. PayPal is testing a similar service for selected customers as part of a pilot to create a more loyal customer base.
• Convenient Ordering: Order online and pick-up at stores. Many online retailers are already enabling this experience. Customers order online and pick-up at stores, saving them time by making it easier for them to order anywhere, anytime. QSR retailers are most suited to offer such experience with Subway and Starbucks having announced similar offerings.
• On-demand Ordering: Enabling on-demand ordering can help retailers address an immediate customer need of replenishing an item forgotten during the weekly shopping. For example, customers order daily household items like drugs, eye care, oral care, etc. from their local neighborhood store and receive items the same day. Uber is testing a similar service, termed Cornerstone, partnering with local merchants in D.C..
• Online Showrooms: Try in-stores and receive products home. Some online retailers are creating entirely new convenient shopping experiences for customers. Bonobos, an online retailer, for example, is adding more physical locations called Guideshops that serve as mini showrooms, where guides serve customers before they make purchases from the online site. This enables Bonobos to deliver personalized, one-to-one service to those wanting to experience the brand in-person.

The list is not exhaustive but all of this can be broken down to – ‘customer convenience’             

If retailers focus on providing convenience in a way that helps customers better manage their daily lives, they stand the best chance to replicate success of Amazon and create a stronger bond with customers.

Article By: Safwan Zaheer is a global product and strategy executive with a Fortune 100 global bank.