Amazingly, Amazon Prime customers hardly even noticed the 20% price increase that now generates hundreds of millions of dollars in extra revenue every year. If Amazon customers barely even notice such an increase in price, how can one find Amazon’s weaknesses when trying to sell and remain competitive online? There may not be a way to halt Amazon’s raging success altogether, but there are plenty of ways to find a way through their defenses.
Thanks to Bob Gaito, CEO of 4Cite, reported by digitalcommerce360.com, let’s learn a little bit about what we can do to create a place for ourselves in the e-commerce world.
It Doesn’t Fit
That’s right. Amazon isn’t exactly good at marketing fashion. Especially when it comes to specialty clothing for petite, plus-size and tall consumers. Consumers buying these items are often more choosy in the clothes they purchase. They have often had bad experiences buying off-the-rack, and tend to go straight for the brands that specialise in their sizes, buying direct.
In a recent survey by Morgan Stanley, when asked the top reason for purchasing clothes on Amazon, a meagre 6% chose “Amazon offers fashionable clothing and brands I like”.
Maybe people shop Amazon for basics like tshirts and socks, but those in search of high fashion seek it elsewhere. It's hard to be sure if some products purchased from or through Amazon are real. Another thing is, luxury items are not a strength of Amazon’s, with their marketplace that doesn’t exactly cater to the kinds of strict controls that are key to maintaining a sense of exclusivity, helping to keep those prices up.
Are They Even Real?
Not only this writer, but many consumers have concerns about the authenticity of Amazon purchases, and brands are also sounding alarms. Some even say Amazon is complicit with counterfeiting. Amazon’s third-party marketplace, Amazon 3P, allows merchants to sell items in a basically unregulated environment. Their listings show up alongside 1P listings (items sold by Amazon), which leaves it almost impossible to differentiate between verified listings and counterfeit goods. Even if Amazon removes the counterfeits, brands can be wrecked by bad reviews about poor quality that stay in their listings for (almost) forever.
Amazon In Europe
Amazon may control 35% of the online apparel and footwear markets in the United States, but in Europe, that percentage is only 8%. Western Europe's #1 company in apparel and footwear is the Berlin-based Zalando, with 10% of the market share. Their success is mostly due to a partnership programme that allows top fashion brands like Adidas and Tommy Hilfiger to access data on what shoppers are buying. These kinds of win-win B2B partnership programmes are starting to catch on in the U.S. too.
A Double Edged Sword
There are retailers who see Amazon as a necessary evil. They don't mind selling products on the platform, but have some reservations about the prices they pay, lost access to customers and possible counterfeits. They are forced to sell at lower prices than even their own websites are able to with no other ways to distinguish themselves from the rest of the competition. Even though Amazon has seen success that so few companies ever see, you have to wonder if their business model will work in the long run. So many of the sellers on the Amazon platform hate the fact that they have to sell there just to remain competitive. It is also a fact that a lot of consumers hate doing business with Amazon – even though they know they won't find a better price, or better service elsewhere. More and more retailers and consumers are exploring alternatives to Amazon Prime, such as Shoprunner.