4 Ways Amazon Has Been Crushing it in Retail
Amazon doesn’t mess around when it comes to taking market share away from its competitors. But while they’ve led the e-commerce conversation for years, dominating the online shopping world simply isn’t enough.
As an up-and-coming brand like yourself, there are many lessons that can be learned through the close examination of a leading-edge company like Amazon. We thought we’d compile a list of the top four ways the company has been crushing it in retail.
They introduced a new members-only rewards Visa
One thing that sets Amazon apart (and keeps their bottom line nice and plush) from their competition is their membership program. According to Greg Buzek, founder and president of IHL Group, Amazon Prime members are among the most affluent in the U.S., with 70 percent of households earning $112,000 or more.
However, resting on one’s laurels does no company good. To combat competitors like Costco, who also have a vast and loyal consumer base, Amazon has recently launched a new Prime Rewards Visa Card. Free to Prime members, the card rewards users with five percent cash back on all purchases made at Amazon, two percent in Amazon credit for restaurant and gas purchases, and one percent cash back for everything else. The benefits put Amazon’s card on par with Costco’s Visa Anywhere Card, making it one of the best of its kind in the industry.
They’re quietly taking over the apparel business
Believe it or not, Amazon is the largest online clothing retailer in the U.S., outselling major department stores like Macy’s, Nordstrom, and Gap. In fact, their market share is expected to hit 20 percent by 2020. However, Amazon may be looking to significantly increase those numbers after a study conducted by Morgan Stanley reveals 60 percent of Amazon shoppers would be willing to buy more clothing through if they carried a wider selection of brands. As a result, Amazon has been trying to woo the biggest names in fashion to position itself as a top-tier online fashion destination. There are also rumors flying that Amazon is looking to acquire American Apparel’s physical store assets, and that the company will be developing a private label active wear line. It’s clear that Amazon has big plans for its apparel business in the coming year.
They’re disrupting grocery store retail
Lauded as the “grocery store of the future,” Amazon’s new venture into brick and mortar retail – Amazon Go – is completely disrupting the food and beverage industry, particularly the grocery sector. Selling ready-made grocery staples, the 1,800 square foot stores are designed with a seamless shopping process in mind. Consumers can breeze in and out with no lines using the Amazon Go app and what Amazon calls its “Just Walk Out Technology.” Products taken from or returned to store shelves are automatically detected and placed into a virtual cart. When consumers are done shopping, they can simply walk out of the store, assured their purchases will be charged to their Amazon.com account.
They’ve cornered the smart home market
Despite having a strong competitor in Google, it seems Amazon has a leg up when it comes to its popular smart home tool, the Amazon Echo (otherwise known as Alexa). The voice-activated device seems to be ramping up Amazon’s marketplace sales as it’s yet another way shoppers can buy through Amazon with virtually no hassle. According to the NPD, owners of an Amazon Echo device spend about 10 percent more money on Amazon than they did before they had the device, and shop 6 percent more frequently than they did before.
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