This is how online retailers can beat Amazon Prime

Market research firm SmarterHQ says Amazon’s bond with consumers is razor-thin and they would quickly abandon their subscription if the advantages proved to be too meagre. This should present opportunities to the competition.

Free shipping

In the United States, Amazon has ninety million Prime members, who spend on average 1,100 euro on an annual basis. Non-members only spend 700 dollars (600 euro). These are estimates, because Amazon does not reveal any actual results.

The most important reason to remain a member is the free shipping included. This is a huge cost-saving addition for those who order a lot online: 82 % stated they would halt their subscription if free shipping was cut. According to SmarterHQ, this is one of the indications that other retailers still have a chance to steal away Amazon’s customers, if they approach it well.

It will difficult and particularly expensive for other retailers to compete with Amazon when it comes to cheap shipping: customers expect things to be shipped cheaply and fast, but that cuts into margins.

Good news for luxury

Another important revelation is that Amazon shoppers hesitate to spend more than 200 dollars for a single product, which is good news for luxury brands. Most purchases also hail from a limited number of product categories: about half of acquisitions are electronics, books, movies and leisure (toys and hobby-related items).

“Amazon’s dominance in retail has been the primary focus of retail executives, investors, and board members – yet, the solution to steal back both market share and consumers’ loyalty have evaded most traditional retail brands. Our report tells a surprisingly upbeat story for retail brands – consumers can be persuaded to ditch Amazon and shop in their store or on their web site. Free two-day shipping is very important to Amazon Prime members,” SmarterHQ CEO, Michael Osborne, said.

Engage more

Other retailers have to motivate consumers to discover new products with them: 63 % indicate they only visit Amazon with a clear idea of what they need. If retailers want to keep consumers at their own web shop, they need to engage them more with new products based on their shopping behaviour. If they don’t, 47 % stated they would stick with Amazon, which does tap into the personal suggestions a lot.

SmarterHQ surveyed more than 1,200 people between 18 and 65 years old.