In this week’s edition of [retail bytes] we take a look at the rise and rise of e-commerce giant Amazon, and how YOU, the retailer, can fight back.
The dark side of Amazon
Twenty years ago Amazon’s Jeff Bezos has opened his online shop, selling a few books on a dodgy e-com platform, only to turn it into a near-monopoly exceeding $90 billion in turnover in 2014. In 2005, with Jeff’s audacious idea to charge the customers for their yearly deliveries up front, Amazon Prime has turned the brand’s fans into addicts as millennials pay for reliable delivery
. Prime customers not only happily fork out $99 (£79) per year for the privilege of “free” two-day delivery (as well as free eBooks, movies and photo storage), but 74% convert from browsers to buyers
, compared with a meagre 3.2% average for the rest of the top 500 US merchants. The scary fact is that those Prime converts practically abandon other online retailers, doing less than 1% of their online shopping elsewhere.
A worldwide relaunch of Prime on 15th July, with deals every 10 minutes and free Prime trials, will attract even more new customers. Forecasts say this could be a bigger day than even Black Friday. Non-Amazon retailers: be afraid, be very afraid!
Thinking about how to fight back against Mr Bezos? Try to beat him at his own game – wrap up your customers in a luxurious ‘treats’ blanket that Amazon can’t deliver. Paperchase has just launched Treat Me
, a new digital reward plan with not a loyalty point in sight! It’s all about treats, surprise bonus products, nice discounts for birthday purchases, free coffee and money off the yummy cupcakes at their in-store cafes (plus an upgrade to free next-day delivery if you splash out over £25). It does have some hiccups – we had to sign up in-store (!) not online, and the actual Treat Me card is plastic rather than just digital – but the scheme is modern enough and it suits Paperchase customers by emphasising entertainment and delight. It’s not a massive money saver, but then if you spend £4.50 on a single sheet of wrapping paper just because you love it I guess value-seeking isn’t at the top of your thoughts!
“If you want loyalty, get a dog”
That was the first piece of advice I got from Mick Jagger when we entered the world of start-ups by launching the first Cyberia Café in London back in 1994. He meant that fame and money would bring people to our door that we shouldn’t trust too much. He was right. But he also told us that our coffee was too expensive for students, as on their meagre grants they had to choose between coffee and Internet surfing with us versus a beer at the pub next door. We borrowed a phrase from the pub and offered them a deal: “Buy 5 Internet sessions plus coffee and get one on the house
”. By speaking their language we showed them we cared and that we ‘got’ their pain, as well as building trust and a long-term relationship. So I was really delighted to see GAME launching their loyalty scheme
with rewards for accolades, like The Resurrector (500 points when you buy your first pre-owned game online or in-store), or SpeedRun (trade in one game within 14 days of it’s launch).
Speak the customer lingo, feel their frustrations, solve their problems and amaze them. GAME‘s loyalty scheme works both digitally and in-store, and uses image recognition technology that calculates the bonus points for each game. Needless to say, it’s beginning to get a real following amongst the gaming community. GAME 1: Amazon 0
Why do most women wear ill-fitting bras? European lingerie giant Hunkemöller, the leading competitor to Victoria’s Secret, has found the answer by setting up Passion Points
, a points-based reward system that helps customers find the type of bra they need to suit their body as well as their lifestyle. A runner? Seductress-in-training? Busy working mum? All of the above? Those (and more!) personal profiles are inferred from the customer’s data and offered back as suggestions for the best bra choices. Amazon’s lingerie tab is no match for great store service (brilliant measurements with a smile), enhanced with a great understanding of customers’ (literal and metaphorical) pain points. Bless.
It’s a miracle!
After razor box subscriptions for men (and Gillette Venus subscriptions for gals), here’s the real deal from my lovely neighbours at Primrose Hill’s NW3 e-com hub: ‘We change the way you experience periods, by cheering you up when you need it most!” Ladies – meet the Period Box
. A fun monthly pack that not only saves money on the basics by providing great value on tampons and pads, but also adds chocolates, ‘happiness super tea’ and a selected set of Lush cosmetics to bring a smile to any girl’s face even when dreaded Auntie Flo arrives. Bingo! Turning your monthly hassle into a monthly delight, and building a relationship with customers at their most stressful moment, is what it’s all about. Kudos to the north London team and good luck with the roll out!
E-tailers tip of the week: show your love to your customers and do something amazing for them on the 15th of July – don’t let Bezos and Amazon Prime eat your e-com lunch!