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BizReport : Ecommerce archives : August 12, 2019

How the FedEx/Amazon split could impact ecommerce

Last week FedEx announced they wouldn't renew their contract with ecommerce megastore Amazon. The move opens FedEx to delivering for competing retailers including big box stores like Walmart or Target, and it also puts Amazon in need of a new package delivery partner. But, what does it mean for consumers and even third-party sellers using Amazon to reach shoppers?

by Kristina Knight

In short, the move could put Amazon - and its third party sellers - in the hot seat during the upcoming holiday shopping season. That's because nearly two-thirds (62%) of shoppers agree that shipping speed defines a positive ecommerce experience for them. And, in the past at least, many shoppers chose Amazon because of their shipping options - including free shipping with Prime Memberships - according to Avionos data about half (49%) of shoppers said that when price and quality were equal, they would choose Amazon over a competitor because of their shipping options.

"FedEx's decision to cut ties with Amazon is the carrier's response to Amazon's move into the fulfillment space themselves. As Amazon has expanded its direct offerings, it is finding itself competing directly with its own customers and partners," said Scott Webb, CEO, Avionos. "We've also seen this move with the launch of Amazon's private-brand retail products, as well as its recently-introduced B2B line of private-label products. The challenge now is going to be on Amazon to scale up its own delivery capabilities quickly enough to match the scale and on-time performance of FedEx. Given that nearly half (49%) of online shoppers choose Amazon over other brands and retailers because Amazon offers better shipping options, it's essential Amazon find a solution to FedEx's loss quickly in order to continue to provide the delivery and fulfillment capabilities its customers expect."
It's also important to note that a full third (35%) of shoppers begin their product searches on Amazon when they have a purchase in mind. In addition, researchers with the Avionos Consumer Expectations in 2019 study found:
·         73% of shoppers avoid brands after only one negative experience
·         87% of shoppers are likely to shop in-store with brands that were previously online only
·         54% want a simplified delivery
·         50% are looking for easy purchasing processes
Meanwhile, data out from Episerver shows that about one-third (32%) of shoppers plan to start their holiday shopping at Amazon and that nearly half (47%) said they would purchase "all or most" of their holiday gifts on Amazon during the upcoming shopping season. In addition to shopping Amazon, most shoppers are now shopping social, according to the researchers, with just over 60% clicking on social media ads and about one-third (33%) making a direct purchase because of that click. Their research also shows that nearly all (98%) of shoppers have left a merchant whose on-site product content was incomplete or incorrect, and about half (46%) have stopped a purchase online because the process was too overwhelming.  
"Our data indicates social media drives purchases and has massive sway over younger consumers," said Ed Kennedy, senior director of commerce at Episerver. "It has evolved from networks' early testing of primitive 'buy now' buttons to a native part of people's everyday lives in which scrolling quickly turns into shopping. Retailers looking to prioritize efforts for the remainder of the year need to look at what is currently working and who is helping drive awareness and ultimately purchases."
More data from the Episerver Reimagining Commerce 2019 study can be accessed here.

Tags: Amazon, Avionos, ecommerce, ecommerce trends, Episerver, FedEx, online shopping trends

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