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BizReport : Ecommerce : February 18, 2020

Experts: What Amazon's brick-and-mortar expansion means for retailers

Amazon's recent earnings announcement was a big one - breaking records for the online giant whose earnings keep going up. From those record breaking earnings to more brick-and-mortar stores, Amazon has a lot of retailers buzzing about what comes next.

by Kristina Knight

Amazon has already changed how many shoppers buy - from 2-day shipping with Prime to subscription services for books, data from Elastic Path shows how the retail giant has already changed ecommerce for example their survey found that most (67%) of consumers are 'checkout less' payments - like Amazon's one-click service. Their data also found that about half (57%) of consumers believe retailers 'aren't doing enough' to make ecommerce seamless and easy.

Now, Amazon is making plans to open more brick-and-mortar stores - with traditional retail hours, seven days each week. And this has many retailers and brands wondering just what is next.

"With Amazon Prime, Amazon has built strong customer loyalty by increasing convenience for customers. The company has bet that by making shopping on Amazon the most convenient option, it can keep customers in the long run. However, the costs of offers like one-day shipping may eventually catch up with Amazon," said Nicole Amsler, VP of Marketing, Formation. "Not every Amazon shopper is motivated by one-day shipping, so there's an opportunity for Amazon to use their customer data to create more relevant offers that increase engagement. Rather than offering the same, extremely expensive offer of one-day shipping to everyone, a more effective and efficient route for Amazon would be to personalize the rewards of Amazon Prime to address what each shopper values."

"One-day delivery is expensive. It previously caused Amazon to lose its profit streak, but now the company is seeing the benefits. Amazon though, as a brand, wants to be known for its obsessive focus on serving the needs of customers," said Harry Chemko, CEO & Co-Founder, Elastic Path. "We know 75% of consumers expect same-day delivery from all brands in 2020, positioning Amazon well to reap the long-term rewards of its delivery investments. Between the seamlessness of its purchasing experience and its understanding of what drives its shoppers, Amazon will continue to excel in e-commerce, but it also goes to show how far a convenience focused, customer-centric experience can go in attracting and keeping loyal customers."

One thing for retailers to remember? According to Elastic Path's research about one-quarter (23%) of consumers say they 'would choose a non-Amazon option' if other retailers offered more in-store options for buying.

Tags: Amazon, ecommerce, ecommerce trends, Elastic Path, Formation, mcommerce, mobile marketing, retail tips, retail trends

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