Study: One in four retailers feel paralyzed by Amazon

Retailers are eager to combat the force of Amazon, but they lack the strategy, marketing dollars and digital resources to do so.



Specifically, 44% of retailers do not know how to respond to the power of Amazon, according to “A New Path for Retail: Co-Existing with the Force of Amazon.” The report is from Bluecore, a commerce decision platform provider.



According to the study, 60% of retailers consider Amazon at least somewhat of a competitor. These companies also continue to grapple with free shipping, email communications and better access to customer data to mimic what Amazon does best: provide highly personalized and convenient experiences for customers.



Specifically, 63% of retailers believe free shipping for loyalty program members is one of Amazon’s most impactful consumer-facing technology initiatives. Yet, only 10% of retailers have significantly increased investment in technology to better compete with Amazon. Meanwhile, 29% of retailers haven’t even changed their data collection and analysis processes as a result of Amazon’s influence.



“Amazon exceeds at listening to its customers. Coming anywhere close to Amazon’s success in this area will require retailers to capture data on customer behaviors and preferences and analyze that data to fuel more intelligent decision-making and more personalized experiences,” said Jared Blank, senior VP of data analysis and insights at Bluecore. “The intent is fantastic, but many brands are severely limited in their abilities to obtain and digest this level of data. Even with an exceptional data and customer experience team, the risks are just too high.”



While better data and experiences are important, Bluecore’s experts have an achievable solution: accept Amazon as friend, not foe, and use the online giant as a distribution channel.



Some retailers have already embraced this opportunity and are selling products through Amazon — but not a majority. To date, only 30% of the retailers surveyed currently sell their products through Amazon. However, for 9%of those retailers, 50% of their sales come from this channel.



“Brands are at a crossroads. The choice is: compete against a company that spends more than $10 billion annually in R&D or leverage that incredibly powerful distribution channel,” said Blank.



With an increasing number of Amazon Prime customers and more consumers beginning their product searches on Amazon, “it’s simply ridiculous to think you’re going to succeed alone, Blank added.



According to Bluecore, the world’s largest brands are using Amazon as a distribution channel, and their revenue and earnings reports are seeing a sizeable uptick. “It’s not about failing to go it alone, it’s about learning to co-exist with this e-commerce behemoth – and embracing the right strategies for your own digital properties to continue to build brand awareness and loyalty,” he added.