In the last decade, retail has evolved at a tremendous pace – ecommerce broke down physical borders, orders are delivered at speeds that narrow the virtual to reality gap, and intuitive communications take second-guessing out of shopping. The enabler of these progressions is technology, and arguably, no retailer has embraced it with as much success as Amazon. While many retailers bemoan the sales that Amazon have ‘stolen’ under their feet, shouldn’t we look at this as an opportunity to grow?
Let’s talk about what retailers may love or hate about Amazon. For one, it has shown that getting shipping and fulfillment just right is rewarding, and that investing in the process helps you achieve economies of scale. Amazon’s laser focus on customers is nothing short of ground-breaking; it recently scored a hat-trick for winning at customer service. Ironically, the things that Amazon does so well are what retailers in general strive for – the point of difference perhaps, is the distance that it’s willing to go. Here’s five of Amazon’s values that reflect the way they do business:
They certainly walk the talk at Amazon when it comes to serving their customers; more than tripling its marketing spend since 2012 to US$7.23 billion in 2016. In ‘The Delivery Advantage’ e-book, we featured Amazon’s successful Harry Potter launches, where its commitment to pre-launch deliveries delighted the series’ legion of fans.
“Invent and simplify”
A question that’s been raised a number of times is whether Amazon is focused on retail or logistics – due to the company’s reinvention of the supply chain process. Its investment into fulfillment centres, trucks and trailers, Amazon Flex delivery partners, and acquisition of French parcel service Colis Privé, seems to suggest the latter.
“Learn and be curious”
Technology has made learning so much easier; and Amazon is spearheading this with machine learning. What makes Amazon stand out is its approach to failure as part of the learning process. Amazon CEO, Jeff Bezos once said, “Failure comes part and parcel with invention. It’s not optional.”
Although failure costs Amazon “billions of dollars”, at its core, it’s frugal. It believes that it’s unnecessary to overspend on things that don’t directly benefit customers – so that means economy flights for all, including senior executives. You could argue that Amazon Prime was built on the idea of frugality, members feel like they’re saving money with premium free shipping.
It’s no coincidence that Amazon has placed this value at the end of its list. Without the ability to deliver results, the company won’t be able to execute any of the above – rather, they would remain only as ideas. And what results they are: Amazon is the 3rd most valuable brand in the world, just behind Google and Apple, with its brand monetary value rising by 54% to $106.4 million last year.
As a shipping technology partner for over 60,000 merchants and retailers, our team at Temando is aware that Amazon has really thrown down the gauntlet on what shoppers expect from their shopping experiences – be it with products or service. Here, we suggest practical shipping tactics based on the five Amazon principles above to show merchants that these values can be applied to anything you do:
- Customer obsession: Nothing dampens online shopping more than concluding with a poor shipping experience. Why not bring customers along the journey by offering relevant shipping options at checkout, complete with dynamic pricing (so there’s no nasty surprises), providing the option to easily track deliveries and making a self-service returns portal available?
- Invent and simplify: Shipping and fulfillment can be a manual, time-consuming task – but does it really need to be? You’d be surprised at how you would be able to increase customer satisfaction when you’re effective at processing orders quicker. Shipping technologies such as ours can streamline how you pick, pack and dispatch orders, and which carriers match the customer’s chosen delivery option.
- Learn and be curious: Shipping is a competitive advantage, so use it to improve customer relationships. Be receptive to customer feedback, and study your data to keep your shipping options relevant. Keep your eyes open for new and popular types of shipping options, such as same-day or hyperlocal (1-3 hours), and make sure you’re set up to easily integrate relevant carriers as you grow.
- Frugality: Many merchants think of shipping as a loss leader due to the traditionally high cost associated to its execution. However, by implementing shipping technology to support carrier selection, you’re saving money in the long run and will consistently get orders out to your customers quicker – and for less.
- Deliver results: Last but not least, all the shipping improvements that you make must result in better performance for your company, such as uptick in sales and/or reputation. By accelerating the shipping and fulfillment process, not only will you create better shopping experiences for your online customers, you’ll save on operational costs without sacrificing the growth of your business.
So while Amazon is a valid threat for many retailers, the company has also pushed the concept of customer-centricity and efficiency to another level – setting a new standard of retailing.
Like dotmailer, we at Temando are dedicated to helping retailers perform at their best in this evolving environment. Just as email marketing is an effective tactic to increase conversion, shipping technology is a valuable tool for merchants looking to be optimally efficient.
Note: This article is an extension on an article I wrote in Internet Retailing that’s published on 7th February 2017.