How To Compete With Amazon This Holiday Season

It’s the most wonderful time of year—and it can be a lucrative time of year for businesses - but lately it seems it’s only the most lucrative time of year for Amazon. But that’s not true – you too can have a successful holiday season and dare I say it, grow your sales.

But it’s not as easy as it used to be. Consumer behavior has changed, and most companies have not kept up with that changing consumer behavior. People love shopping online - in fact online sales in the U.S. are forecasted to reach $523 billion by 2020, up 56 percent from $335 Billion in 2015. However much of this growth is happening outside the U.S. According to Shopify, "Ecommerce in India is projected to hit $136 billion by 2020 (up from $18 billion in 2014). That’s a fraction of the $523 billion the U.S. is forecasted to make by 2020, but a much faster growth rate in comparison as the U.S. was sitting at $298.3 billion in 2014." So ecommerce is growing, but it's not the same pace of growth in every country - and there's still room for other players besides Amazon or even Walmart. I love Amazon. I shop there and I also wrote about them extensively in my book "More Is More." However there is still room for others to make a sale.

Times When Being Smaller Is An Advantage

Every week I write and speak about how to differentiate with customer experience – it’s highly do-able, you just have to commit to doing it. While Amazon is convenient – it's not always the first choice for consumers who are looking for more than a fast delivery and a cheap price.Customers do still enjoy going to a store, in fact Walker Sands found that aside from books, consumer electronics and office supplies most people prefer shopping in store. There are ways you can differentiate on customer experience in ways Amazon can’t. Sometimes being small is an advantage. You are more nimble – you can add an extra touch to a product or service. It’s easier to create stories around your products and services, stories that make your offering compelling. Amazon does transactions very well, but there are times that customers are looking for more than a transaction.

For example pop up stores have become a big hit – how much of that pop-up experience is the actual product being sold, and how much is the buzz and excitement around the event? This means the stories around the products and services. Or perhaps you have a community of enthusiastic advocates you can bring together around the holidays. Is there an exclusive influencer or celebrity at the event – or something extra special about the product? How about some extra training or education around how to best use the products? Any of these things will get people out to your physical store – even if it’s a temporary store.

Amazon’s success has forced companies to get creative, and that’s not necessarily a bad thing. While many of you might sell your goods on Amazon, and are happy as a reseller, others might want to get a bigger slice of the holiday retail pie. That means you will need to do more for the customer – cook up something special. Even if it’s a new way to make customers lives easier and better. After all, that’s what we should be doing all the time – thinking of ways to make our customers lives easier and better.

Out-Marketing Amazon

You should be prepared to compete because no matter what industry you are in or what you are selling, you likely compete with Amazon in some way. With its two-day shipping and range of products at competitive prices, Amazon is where many customers get all their holiday shopping done. Taking on the retail giant may seem like an overwhelming task, but with a customer-centric strategy, it is possible to compete with Amazon this holiday season.

Jim Fosina, CEO of Fosina Marketing Group, says it all comes down to out-marketing Amazon. Smaller retailers need to give customers a reason to shop in their stores, says Cooper Smith, Director of Amazon Research at L2, either through a strong customer experience or unique product offerings. Local retailers might not have the same expansive product offerings, but they can focus on what they do have—customers right in their neighborhood and a better understanding of what those customers want and need.

Pricing Strategies

One way retailers can compete with Amazon is by getting creative with how they price and sell products. With its huge customer base, Amazon has the ability to cut prices and quick delivery. Smaller retailers might not be able to compete with Amazon on prices for individual items, but they can put together holiday bundles of two to three items that can be sold together to appeal to shoppers, says Jim. Instead of a customer going on Amazon to buy one toy at a low price, they can go to a local store and buy a holiday bundle of three toys for a discounted price.

Jim also points out that local retailers can offer items with incremental discounts so that customers get a greater discount the more items they buy. Many customers buy multiples of items to give as gifts, so offering a benefit such as a 10% discount for buying two products and a 20% discount for buying three or more products can entice customers to purchase more. In fact at my house we recently bought 23 and Me – a genetic testing and data analysis device that tells you amazing things about your family history. It turned out if we bought one we got the second one half off, so we bought two. At $200 a pop, it made a difference in our overall purchase price.

Other retailers are getting creative with pricing by building subscription boxes that put the product right into the customers’ hands on a regular basis. These products are exclusive to their own websites – for example Fabletics (you might recognize Fabletics as actress Kate Hudson’s brand). Through Fabletics you can benefit for being a loyal member – and member based retail is becoming increasingly popular. StitchFix or LeTote are popular companies that create tailored outfits for customers that are sent to the customers' door. Nordstrom is now testing a clothing store with no clothes - but a store that focuses on experiences and a stylist who picks out special items for the customer. Customers can get a manicure or enjoy a latte while a tailor arrives to fix the clothes for the customer. Cut out the work of customers searching through large amounts of inventory by doing the heavy lifting for them, even before-hand.

Gift box subscriptions will be a huge trend during the upcoming holiday season, and they play right into local retailer’s wheelhouses. A discount on the first subscription or the entire order can make the service more appealing and turn one-time holiday shoppers into year-round customers.

Amazon tends to run its holiday specials during a very established period from Black Friday to Christmas Eve. In order to compete, other retailers can start running their promotions earlier so customers can get a jump start on shopping, which according to Cooper, also helps other retailers stand out against Amazon.

Delivery Options

One area where local retailers find it hard to compete with Amazon is delivery. After all, few companies can offer free two-day shipping. Again, smaller retailers can find ways to match or improve on Amazon’s offerings in a way they can control. They might not be able to offer free shipping on every order, but they can offer same-day delivery within a certain radius of the store. Try partnering with a delivery service that can deliver items in their neighborhood on the same day they are purchased says Jim Fosina. Local delivery services also often make it possible for customers to schedule their own delivery times and gives the retailer more control over the quality and timing of the delivery. Personal service and quick local delivery are great ways to make smaller retailers stand out.

Extra Services

During the busy holiday season, customers appreciate when companies put forth extra effort to win their business with extraordinary service and personalized touches. Many retailers offer gift-wrapping services, which can be a huge time-saver for customers. Other retailers offer to store purchased items in a warehouse and deliver them closer to the holidays so customers don’t have to worry about hiding the gifts in their own homes. These little touches can go a long way in drawing customers to the store.

Although Amazon is popular, it doesn’t have to be the only place people shop this holiday season. By creating a personalized strategy and focusing on their strengths, smaller retailers can compete against Amazon and have great success throughout the holidays and all year round.

Blake Morgan is a customer experience futurist, author of the book More Is More and keynote speaker. Sign up for her weekly newsletter here.