Consumer shopping habits this peak season are already unlike anything the industry has seen before. A slow burn, ultra-cautious approach that could well lead to a last-minute rush – a rush that Amazon thinks it’s going to win.
The conventional wisdom – as far as convention can be wise in such unprecedented times – goes something like this: shoppers are being cautious about their Christmas spending, they are also worried about shortages and so, despite the hoopla around Black Friday, are likely to be slow to start their peak shopping. Come mid-December, however, they all realise they need to start getting gifts and so turn to Amazon, while everyone else loses out.
The idea is that Amazon is well-stocked by dint of having so many merchants selling on the site. Amazon also, perhaps more tellingly, has delivery sorted. Not only does it have the goods – at a competitive price – but it also has rapid delivery sewn up.
Post-Black Friday stats tell it all. According to Amazon insiders, the retailer had a record breaking Black Friday this year, with Dave Clark, CEO of Amazon Worldwide Consumer, telling CBS in the US on Cyber Monday that “we’re right in the middle of ‘Turkey 5,’ (the five days between Thanksgiving and Cyber Monday), and we’re off to a great start. We had a record-breaking Black Friday and we’re seeing customers engaged.”
Conversely, at the same time, commenting on Turkey 5, analysts at Forbes were saying: “In general, performance for many brands was somewhat muted compared with the bumper 2020 sale event. A considerable factor could be that it appears shoppers did not flock to Black Friday deals as eagerly this year”. While this is only a snapshot, it paints the picture that this peak season is Amazon’s to lose.
All about experience
The thing is, it isn’t game over just yet. While Amazon is the easy option for many shoppers, offering what Amazon has to offer could yet bring sales to retailers looking to tap into this December’s acceleration of shopping. It can also prepare retailers for 2022, when the same competition for risk-averse shopper pounds is set to continue.
And the way to do it is through delivery.
Consumers are used to ultra-fast delivery for grocery and hot food and expect this elsewhere. In fact, getting rapid delivery sorted as standard for your goods could be how many retailers out-Amazon Amazon this Christmas – and beyond. For many shoppers Black Friday is too commercialised and they don’t believe they are getting particularly good deals. However, guaranteeing that they can get their items rapidly can change this mindset.
Rethinking last mile and last-minute deliveries holds the key. Research carried out in October by Gophr shows that 22.5% of retailers are already looking at adding same day delivery, with 7.5% looking at doing it with a two-hour specified window.
Taking their cue from the grocery and the hot food delivery world, some merchants are looking at how creating an agile last mile and same day delivery processes that augment existing carrier strategies, can turn headwinds into competitive advantages.
Adding the option to have items delivered within hours, taps into the last-minute approach to shopping for peak that many consumers are likely to adopt this year – and it makes Amazon’s offer suddenly less unique and places more retailers in line to gain Christmas sales.
Offering this level of instant gratification and last-minute delivery is also increasingly what drives consumer choice. There is growing evidence to suggest that people are, as slightly more stressed shoppers, a little bit less brand loyal. They kind of have an idea that they want to buy, but don’t necessarily go to the one retailer they have used before. Increasingly, people are thinking ‘I just want that certainty that the item arrives, not so much that the brand arrives’.
And having this certainty leads a lot of people to make shopping decisions based on Trustpilot reviews and non-reviews by customers. In fact, a significant number of reviews today are not always about the quality of the product itself, but about the delivery experiences people have had.
This should lead retailers to want to have as many irons in the fire on the delivery front as possible.
Making it happen
But how does it work in practice – it is one thing to want to compete with Amazon in terms of delivery, but how practical is it in the real world?
The answer lies in using a range of carriers. Gophr research shows that 25% of retailers use in-house carrier fleets only, but of the rest, 40% use one of two carriers. Only 12.5% use five or more. Having a wider range of carriers not only creates economies of scale, but can also allow any retailer to create the range of delivery options that lead to the experiences that create the impact that generate positive reviews – the benchmark for standing out from the rest.
One of the biggest challenges for retailers is having a single view of stock – if you haven’t got that view and don’t know where items are, then it’s hard to be clever about Omni-channel. One solution is to have a dedicated same day provider, who collects and performs multiple drops both from the warehouse and the store, and delivers direct-to-consumer.
The alternative is a more ad hoc approach, where the retailer recognises that they have the item in stock in a specific store. If they use the right same day carrier with its own front-end booking engine, the item can be collected and delivered efficiently and, most importantly, cost effectively. This is increasingly important with the growth in demand for ‘hands free shopping’ where customers want to buy in store and have items shipped directly to their home or as a gift to someone else.
By looking anew at delivery, not only can we avoid this Christmas being monopolised by Amazon, but retailers can build the bedrock of a strategy that will support them across the board in responding to rapidly changing consumer habits in 2022 and beyond.
Patrick Eve, chief operating officer, Gophr