What is the Amazon Effect?

what is the amazon effectThanks to the Amazon Effect, eCommerce is changing, and in a big way. Amazon has rewritten the online selling world, making it more difficult for independent retailers to become digital providers. Every year, Amazon deepens its connection with consumers. As its online impact spreads, so does its popularity.

What is the Amazon Effect?

The Amazon Effect is a growing Amazon selling popularity which is simultaneously pushing out new market entrants while redefining e-commerce as a whole. Despite Amazon’s massive popularity, Amazon is still seeing incremental year-to-year growth.

To fully understand what is the Amazon Effect, we’ll need to look at its origins. In 2016, Amazon experienced a 25.2-percent sales increase in North America alone. That same year, e-commerce sales had only increased by 15.6 percent.

Throughout the past decade, Amazon has seen consistent growth. Now, other online sellers are trying to compete. Consumers want to lower their store-shopping needs, and sellers are rising to the challenge. This said, Amazon’s massive wake makes it difficult.

How Has Amazon’s Climb Affected Retailers?

Today, Amazon’s sales actually surpass a few major retailers, including:

  • Apple
  • Netflix
  • Tom’s Shoes
  • Uber

What is the Amazon Effect? The Amazon Effect, itself, is a broad term. It described the way customer habits have changed, purchase-wise, with Amazon’s presence. It also refers to the way e-commerce, as a whole, has evolved over time. Modern customers have it easier than ever to buy products. If they think about it, they can buy it. All they need to do is click a mouse button. As a result, retailers are being impacted.

Preferred Online Shipping

Because Amazon’s shipping speed is incredibly quick, Amazon has created not only a cost-effective alternative to retail buying—but a faster one. Amazon’s times are getting faster, and they’re always closing the gap between order verification and doorstep delivery. In the previous two years alone, Amazon has cut out 1.5 days of its shipping time. In 2017, Amazon sold to over 80 million Amazon Prime subscribers.

Amazon is easy to order from. Between their single-click order options, intuitive re-order options and Dash order feature, consumers need only be connected to their server. Amazon’s digital presence has created a titanic shift in product selling methodology—and its waves are directly impacting retailers.

The Need for In-Store Mobile Technology

Amazon’s quick-access buying options are forcing retailers to become speedy themselves. A study conducted by SOTI discovered several truths about modern brick-and-mortar selling:

  • 92 percent of shoppers prefer stores with mobile platforms.
  • 65 percent want location-specific coupons.
  • 61 percent prefer interacting with a kiosk than a store representative.

Successful retailers not only offer stellar mobile experiences. They offer ongoing deals, buyer-personalized coupons and—of course—a heavy focus on SMS-based loyalty programs.

What Does the Amazon Effect Look Like?

It can be tough to determine how the Amazon Effect looks up close. In theory, Amazon’s astounding success would—of course—affect retail sales. By closing in on the Amazon Effect’s unique components, however, we can better understand its dynamic industry impact.

The Modern Retailer Dance

The Amazon Effect has fundamentally affected the way buyers shop for preferred goods online, too. Now, buyers can access product data, reviews and other relevant pieces of information. As a result, online sellers must boost their visibility, relevance and digital market impact.  Today’s online sellers often rely on the following to serve customers effectively:

  • Market data
  • Selling algorithms
  • Dynamic pricing strategies
  • Competitive selling tactics

By using digital marketing data, an online seller can both reach new customers and continue serving them. Over time, an information-based brand can become incredibly successful with online selling.

How Can You Keep Up with Amazon?

The Amazon Effect has slowly increased in previous years. As online shopping grows in popularity, retailers have begun to realize they need to offer more to compete with the e-commerce tycoon.

Businesses need to give shoppers a reason to visit their stores. The Internet of Things, however, has made online product searches—and eventual purchases—incredibly easy. Today’s products are simply more visible, and retailers have attempted to react by embracing digital selling strategies. This said, they’ve had a hard time competing against Amazon.

While many providers have faded from former e-commerce glory, a few have managed to outshine the competition. Generally speaking, a few strategies exist to keep up with the Amazon Effect.

A Unique Buying Experience

Some brick-and-mortar providers have acknowledged Amazon’s unique selling strategy on a deeper level. And by mirroring Amazon’s fast-paced, affordable buying novelty, these providers have created effective brick-and-mortar purchasing options.

Unique buying experiences are in, and they’re seen in malls particularly. Exciting, cozy or otherwise subversive environments are boosting retail sales to competitive numbers—even by Amazon standards. A few examples of unique buying experiences and environments include:

  • Furniture testing areas
  • Living room imitations
  • Furniture-centric home theater areas

Online Products in Physical Locations

Finally, some retail outlets have kept up with the Amazon Effect by subverting online selling completely. These brands have brought online products into the physical world, subverting e-commerce into a brick-and-mortar experience.

Smaller e-commerce brands, meanwhile, have crafted personal purchasing experiences for dedicated customers. While it’s difficult to compete with a worldwide provider, creating a niche purchasing experience certainly works.

Amazon is great at selling. Yet, retailers still have the upper hand when it comes to marketing. Customers peruse Amazon differently than they shop at stores. If you’re a retailer catching onto Amazon’s impact on the buying world, you can still make a decent profit.

To stay efficient, however, you’ll need to be consistently interesting, using emergent marketing strategies and technology alike. Amazon might control the digital buying world, but your brand in is your hands—and it’s up to you to get creative.

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