The big dog. The unicorn. The Goliath. With virtually limitless inventory, unprecedented fulfillment speed, and diverse product/service lines, Amazon has a corner on the market that no other retailer can compete with...right? Not exactly.
I recently sat down with Sean Duffy, VP of Customer Loyalty & Contact Strategy, for a fireside chat at eTail West to get a better sense of retailers’ inner monologue when it comes to reacting and responding to Amazon. The takeaway? Amazon can be beat. The answer? Personalized interactions that consumers can’t find anywhere else.
From your perspective, what does Amazon do really well?
So much. But one of the things that really stands out is their fulfillment, especially in terms of anticipating customer expectations. It’s not just our immediate competitive set that we’re looking at when it comes to delivery and fulfillment operations, but what does the consumer expect in terms of Amazon and how quickly they can get back to them.
Amazon also has a big advantage in terms of their size and the amount of data they have, as well as the immense resources they have to mine through that data. We work with a number of third party service providers to keep a competitive edge.
Lastly, Amazon seems to have different financial standards than other companies. They can afford to take more risks and try things that may not be profitable, which is a luxury we don’t necessarily have. Amazon has the ability to test fast, scale fast, and move on to the next thing.
"Amazon has the ability to test fast, scale fast, and move on to the next thing."
What is Amazon not doing so well that other brands can capitalize on?
I think what’s important for brands like Bloomingdale’s is to figure out what their competitive edge is versus Amazon. For us, we’re in the fashion apparel and accessories business and that’s a space that Amazon is a little newer to and weaker in. We don’t necessarily have as much crossover at the higher end of merchandise that we sell as Amazon does.
What we’re really focusing on is what we call guided selling discovery. How do we help the consumer find the merchandise that she might not even know she wants when she first comes to our site or stores? We do hear from our customers that they look to us for fashion inspiration. They love our content that not only tells them what the trends are, but how to wear the trend and style it. So we’re trying to lean into that competitive advantage because that’s an area where Amazon is weaker. Most Amazon customers are coming with specific items in mind to purchase, so there’s not as much of that discovery or inspiration there.
One thing Amazon doesn’t have (yet) is the brick-and-mortar side of the business. How do you currently use in-store experiences to your advantage?
It’s definitely an advantage for us. Bloomingdale’s has put a huge focus on in-store experiences. It goes back to that inspiration element and being able to offer fashion expertise. Let’s say a customer comes in to buy a new dress from us. The sales associate or style advisor can take them over to the shoe department to get shoes that are going to look amazing with that dress, as well as a handbag that goes with it. Pus, you can actually touch and feel the product.
Our “buy online, pick-up in-store” option (or “BOPS” as we call it) also helps us match up to that delivery and fulfillment edge that Amazon has over us. This way, we can use our stores as fulfillment centers for faster delivery.
"Bloomingdale’s has put a huge focus on in-store experiences. It goes back to that inspiration element and being able to offer fashion expertise."
Yes, omnichannel fulfillment is huge! At SmarterHQ, we surveyed consumers and found that in-store fulfillment is a big motivator for them. People would rather return things in-store versus mailing them back, even if shipping is free. And the busier they are, the more likely they are to buy online and pick-up in-store so they can get it the same day.
So, let’s talk marketing. What marketing tactics and initiatives are you implementing to beat Amazon?
Behavioral marketing has been a big focus for us. People are busy and don’t have time to sift through a massive product catalog anymore, so it’s essential for us to put products in front of them that they’ve shown interest in in the past or that we think they might want in the future based on their previous purchase history.
We know consumers today are also very distracted. They’re always price shopping and moving on to the next thing, so sometimes, they forget they were even looking at something. Amazon does a great job of putting products back in front of shoppers through email or when they land on the site. That’s why it’s crucial for us to send messages in real time that pertain to the content they previously engaged with. Amazon has an enormous team of data scientists that do this every day. At Bloomingdale’s, we have a team of data scientists, too, but it’s much smaller, which is why it’s essential to have a behavioral marketing platform that allows you to stand out among Amazon and other big competitors.
"Amazon does a great job of putting products back in front of shoppers through email or when they land on the site. That’s why it’s crucial for us to send messages in real time that pertain to the content they previously engaged with."
Yes. I recently read that 35% of Amazon’s sales are from practices like behavioral marketing. What are some of the behavioral marketing tactics you use?
We employ a number of behavioral marketing tactics, including cart abandonment, browse abandonment, product alerts, etc. But beyond triggered messaging, we like to pull behavioral segments to personalize mass marketing messages to make them more effective. For example, Bloomingdale’s has a lot of sales and promotional events, so we leverage previous behaviors to make sales messages even stronger. We’ll send you a promotional event that’s, say 25% off for friends and family, but we’ll also include items you’ve been browsing recently to show that now’s the time to buy because we know you’re part of the friends and family discount. Then, at the end of the event or on the last day, we show the products they’ve browsed during the promotion to let them know it’s their last chance to get it at the discounted price. We don’t just go through email either. We also reengage through the site and mobile push.
Plus, we pair behavioral marketing with our editorial content to make it more helpful and show our fashion expertise. If someone browses coats and then leaves the site, we want to send them marketing messages about those coats, but by pairing it with editorial content about coats, we can still offer curated merchandise, but with a fashion perspective.
What about pairing omnichannel with behavioral marketing?
Oh yes. It’s not just about a digital footprint. We also take any in-store purchases a consumer makes and send them messages based off of those purchases to form a more holistic view of the customer. We also factor those in-store purchases into cart abandonment campaigns, so if the customer added an item to their cart online and then purchased it in the store, we won’t bother them with an irrelevant abandoned cart email about an item they already purchased in-store.
"We also take any in-store purchases a consumer makes and send them messages based off of those purchases to form a more holistic view of the customer."
Here’s the real question—does behavioral marketing really work?
Absolutely. We’ve seen tremendous ROI and have grown campaign revenue exponentially. SmarterHQ has been instrumental in our success to stay ahead of Amazon. Partnering with you is an investment we’re happy we made and haven’t regretted for a second.