Competing with Amazon & eBay
By Plillip Woolgar
The giant in the room when it comes to retail stores that want to roll out e-commerce sites is Amazon. Founded in 1994 by Jeff Bezos, the Seattle, Washington-based company sells a wide range of products and services to consumers motivated by low costs and fast shipping.
First off, retail stores should give up the notion of besting this behemoth. Amazon, which in 2015 reported revenue of US $107 billion, saw its e-commerce market share climb to 26% in 2015, compared to 22% in the year-earlier period. Then there are other formidable, though not nearly as dominant, online marketplace players like eBay out of San Jose, California.
The question, however, remains: how can retail stores compete with the likes of Amazon and eBay? While many retail stores may not have the money or the distribution channels that the major players have, there are some strategies they can use to make their mark in e-commerce.
What follows are a number of things retail stores can do today to ensure that they can compete in an online marketplace dominated by a relatively small handful of hefty giants.
Sell outside the box
Amazon is big on retailing product categories like toys, electronics and media, which means that retail stores seeking to get a piece of the action will have their work cut out for them if they, too, compete in such segments. While it’s possible to have a measure of success doing this, retail stores will increase their odds of success by offering products or services in categories that the Amazons and eBays of the world don’t cater to as much. That’s why it will help retail stores if they have products or services that are of the one-of-a-kind variety. Retailers should carefully study Amazon and eBay to see what they offer and what they don’t offer.
One thing retail stores should do is figure out exactly what makes their business unique. This means considering questions such as the following:
What market segment is being targeted?
Is the product or service being offered of the one-of-a-kind variety?
Remember that the likes of Amazon and eBay are specifically focused on, firstly, cost and, secondly, timely delivery. That leaves retail stores with an opportunity to focus on their unique attributes and to use them as selling points to differentiate themselves from Amazon and eBay.
Look the part
Retail stores looking to set up an online storefront to sell their products and services need to ensure that their e-commerce sites both look professional and work as they ought to. Consumers won’t be willing to shell out their hard-earned dollars on a site that doesn’t inspire their confidence. If necessary, retail stores should retain the services of web designers who can build them a professional site that includes the necessary e-commerce functions. One thing to keep in mind when putting together the website is that a high rate of consumers bail out of the buying process because of the tediousness of the process. Some of the reasons consumers abandon their online carts before completing purchases include the following:
The checkout process is too complicated and annoying
Shipping costs are too high or shipping time is too lengthy
Shipping fees are listed too late in the buying process
Too few payment options are available
Forced to create an account
Not enough information about security features is provided by the site
Product or service costs too much
Product information is insufficient
Try different distribution models
Retails stores can try different strategies, such as flash sales, that enable customers to pick up products or services at attractive costs. Such programs usually require shoppers to make a buying decision in a short amount of time, such as within a 24-hour timeframe, so interested consumers will be more likely than not to spend for the right offer at the right price.
Many consumers prefer to shop locally rather than to buy from some large, faceless entity based elsewhere. Retail stores can tap into this consumer sentiment by marketing heavily in their home markets so that consumers who like to shop locally will know that there are options for that.
Seeing is believing
Retail stores can differentiate themselves from Amazon and eBay by providing a more fulfilling shopping experience. As has been said in various reports, the large online marketplaces are basically nothing more than glorified search engines that consumers can use to find and buy products or services they need or want. What retail stores can do is create a more fulfilling shopping experience that targets their specific demographic. So, instead of being merely a search engine, retail stores can provide a visually stimulating experience where shoppers can do the virtual equivalent of window shopping. Focus on the web page design, use of graphics and product descriptions to entice buyers and to encourage more of them to make purchases.
It is very much possible to succeed in an online retail environment dominated by a small handful of heavyweights. Trying to compete on cost or shipping speed probably isn’t the wisest idea, because retail stores will be hard-pressed to beat the Amazons and the eBays of the world at their own game. But there are definitely enough customers to go around, so retail stores that can chart the right course can enjoy success as they branch out from bricks and mortar to e-commerce.
Phillip Woolgar’s career as a journalist began after he graduated from the Langara College Journalism Program in 2008. He went on to become an editor and award-winning newspaper reporter.