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3 Shipping Scams That Are Killing Your Ecommerce Profits

3 Shipping Scams That Are Killing Your Ecommerce Profits

In our last article, Are DTC Companies Risking it All For Killer Customers, we discussed the 4 common return tactics abusive customers use. Unfortunately, the abuse doesn’t stop at your return policy… With the holiday season in full effect, killer customers are on high alert and merchants should be too, considering more than 2.5 billion packages are expected to ship this holiday season. We teamed up with our fraud prevention partner Signifyd and the team at ShipStation to help online merchants stand clear of the 3 most common shipping scams killing ecommerce business profits this year.

1. Package Rerouting

 

Fedex truck on street with smoke on the side

 

Package rerouting commonly occurs when a customer commits payment fraud and uses a stolen credit card to make an online purchase. In most cases, the transaction is cleared because the legitimate cardholders address is used without being flagged. However, once the customer receives shipping confirmation and the package is en route, the original address is changed.

In another case, the customer purposely provides a false shipping address and monitors the package through the online tracking information given upon confirmation. Once they’re notified that the package is undeliverable, the customer contacts the shipping company to provide a new delivery address. Unfortunately for merchants, additional fees may occur when the package is successfully rerouted.

Lastly, a customer can make an online order and after confirmation, call the merchant to ask if their preferred shipping service can be used. Most likely, these customers have an established relationship with outside shipping services and are confident about receiving shipped items unflagged, making it harder to track and prove the package was ever delivered.

In all three cases, by the time the legitimate cardholder notices the unauthorized purchase, the scammer’s already enjoying their products free of charge. These types of fraud leave the online business with losses up to $10,000 in shipping fees, lost product, and lost profit… so now what?

 

Preventing Package Rerouting

Solving this issue requires a multi-step approach. First, it’s important to note not all customers have malicious agendas. In fact, many may have good reason to reroute a package. To avoid upsetting or offending legitimate customers, merchants should start with a clear shipping policy stating there’s a zero-tolerance for package rerouting on their website, social media profiles, and email confirmation.

Creating detailed shipping terms and conditions that address various errors that arise during shipping is important when dealing with customer claims. One major way to gain clarity into issues is to offer tracking. Tracking lets you know that an item has been delivered.

                                                            -Jennifer Ruben, Partner Marketing Manager, ShipSation.

 

In addition to providing these details, make sure a customer’s zip code and address are validated before shipping. Lastly, be sure to ship only to the original address provided in the confirmation details, especially for a large order.

 

2. Item Not Received 

by Mike Cassidy at Signifyd

 

4 Wrapped gifts on doorstep

 

One of the most insidious shipping scams occurs when the item marked ‘not received’ actually was received. False INR claims cost retailers millions every year, but they also cost merchants their reputation. Once word’s out that a retailer tends to give in to INR claims, be it via social media, dark web forum, or even a legitimate publisher, similar claims will flood in.

The scam is popular because it’s easy. No need to commit online identity theft by stealing someone’s personal information, or hack into a customer’s retail account. All abusive customers need is the will to cheat the system without care.

To put it simply, scammers accomplish this by ordering a product, bringing the product into their homes, and then telling  their credit card companies their orders never arrived. Such claims create one of the thorniest situations in the retailer/customer relationship.

If the retailer challenges an item-not-received claim and it’s legitimate, chances are the retailer just lost a customer for good. Signifyd’s consumer survey, conducted by market research firm Survata, found that nearly half of consumers will endure no more than one bad experience before abandoning a retailer for good. Let’s agree that being called a thief by a retailer counts as a bad experience.

On the other hand, if a retailer accepts the INR claim and it’s not true, the merchant is out of the goods and the revenue it would have received. You can up your fraud protection game, by adding a few things to your to-do list.

 

Preventing INR Claims

The first step is to make sure your return policy is clear, and your return process is easy. You also want to be clear in your descriptions and presentations of the products you’re selling. Not only does this provide your customers with a better shopping experience, but it also reduces the possibility they’ll be unpleasantly surprised when their order arrives.

Some consumers become frustrated with the work required to return a product and decide to get a refund by claiming the product never came. Being clear about returns and the products you’re selling helps reduce the incidence of unhappy customers who suddenly feel entitled to game the system.

There are also ways to challenge an INR claim, of course. Finding photos on social media of a customer with a product they claimed they never received, for instance, is fairly strong evidence that the item was received — as is a customer’s signature accepting the order. (It happens.)

Dealing with INR claims will never be pleasant, but with some forethought, it can become much less of a chore.

3. Hijacked Shipping Accounts

 

Shipping railroad tracks with multiple trains during sunset to represent hijacked shipping accounts

 

Nothing’s off-limits when it comes to fraudsters, not even shipping accounts. If your company’s shipping account is online or accessible to the public, you should keep reading.

Hijacking shipping accounts is a free and undetectable way to use a stolen shipping account number to make large shipments. Once these account numbers can be accessed, they are often used in the same manner as stolen credit cards and become can punch your profits in the gut.

In less severe cases, employees use their company’s account number to ship personal packages from time to time. In the worst case, these stolen accounts are used to ship drugs, stolen goods, or fake checks long distances, sometimes across the country.

Take Montana State University for example, in 2010 the school had a $180,000 pile-up in fraudulent shipping costs after more than 9,000 consumers received fake checks. Fake checks are normally used to trick recipients into wiring money for a small fee.

Businesses of all sizes are easy targets, as their shipping bills typically aren’t monitored close enough. However, with little knowledge of who’s accessing your account, it becomes harder to track down the culprit.

 

Preventing Hijacked Shipping Accounts

In order to properly prevent hijacked shipping account numbers, there must be a central management system that includes these features:

  1. Make account numbers accessible only to specific and trustworthy employees. Remember, less is more.
  2. Implement a reporting system that allows these users to be able to regularly schedule pickups and track packages, without constant authorization needed.
  3. Monitor frequently. With a tracking system in place, data can be used to track user’s activity for cross reference purposes.

 

Final Thoughts

Tracking down evidence of fraud (be it wire-fraud or shipping) takes time and not many merchants got into the business to become Sherlock Holmes. However, without proper detective work, shipping scams can be a legitimate threat to merchants, their customers, reputation, and profits. Luckily, there are fraud-protecting and chargeback-management solutions that highly automate the INR dispute process and some also eliminate the merchant’s risk. Ask us more about INR Protection here. 

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10 Articles To Strengthen Your Holiday Ecommerce Strategy

10 Articles To Strengthen Your Holiday Ecommerce Strategy

As Thanksgiving quickly approaches, retailers and e-marketers have a lot on their minds. With touchpoints coming from multiple directions across your customer journey, it’s easy to overlook critical components that can immediately affect your revenue goals. To keep you on track, we created this holiday roadmap that covers every part of your funnel. Grab some hot chocolate, scroll through our list, and rest easy while your holiday sales jump like Jordan.

1.   The Difference Between Good & Great Content.

There are multiple ways to leverage content to hit different audiences. However, doing so well enough to generate leads, encourage customer loyalty, upsell, and build trust can prove challenging. In these 3 blog posts, we share a few gems to help you produce content that engages and will continue to drive value far beyond the holiday season. If your content marketing strategy doesn’t utilize these key principles, it’s not too late to inject them into your plan. Take a look and maybe grab an idea or two to spice up your content.

Content marketing should be a major cornerstone in your marketing arsenal. By providing valuable, free content, that builds customer empathy, you will attract and convert new prospects into brand-loyal customers. The caveat to producing great content is having the foresight to produce content that aligns with customer interests, while continuously delivering new content that your customers hunger for.

— Christopher Yin, Creative Director, Redstage

Revenue Increase With Good Content

Key Take-Aways:

Know your audience and create content that hits them on a personal level. What are their interests and hobbies? What are the causes they care about? With a more complex buying process, B2B companies may want to consider producing content that hists each part of the sales funnel. Are you helping your audience think critically about the industry? How can you make your customers better-skilled professionals Furthermore, how can you align your brand with these things in a way that’s authentic and true to your brand?

The Difference Between Good & Great Content Marketing.

Top 5 Trends in B2B Personalization & Social Selling.

What Prime Day Can Teach Us About Holiday Sales.

2.  How to Stop Your Store from Crashing

Thanks to your engaging and authentic content, customers are flocking to your store. Lucky for you, holiday spending is expected to increase by 5% this year, but most customers won’t be visiting your physical location. More than half (around 53%) of your holiday customers will shop exclusively online. This surge in traffic has the potential to cause a lot of stress on your server, causing crashes or bugs that leave your customers aggravated or empty-handed.

You’ve worked hard to build trust and develop customer loyalty, you can’t fail them now, and with our help, you won’t.

The holidays are a time of increased profits, but that comes with a huge load on websites. So if you haven’t done proper stress testing to account for higher demand, you won’t know how your online store is going to react.

Adam Morris, CEO at Redstage

Revenue loss and Conversion Rate

Key Take-Aways:

Proper preparation prevents poor performance. Your customers won’t let you off the hook if you give them a poor experience, especially if you’re a wholesaler or manufacturer who has an inaccurate count of inventory. Twitter can be your best friend or worst enemy. Check out these articles to ensure you stick with the former by properly monitoring your site and completing our performance checklist. These 4 articles will help you optimize and digitally strengthen your store for the holidays.

Ghosts Of Black Fridays Past: 3 Crucial Warnings For Retailers.

Black Friday Countdown: 4 Critical Last-Minute Store Optimizations.

Black Friday Countdown: 8 Omnichannel & Back Office Final Touches.

Q&A with Redstage’s Adam Morris: Prep for Black Friday 2018.

3. How To Unlock More Mobile Holiday Revenue

By now you have done the research and collected the data. You know your customers’ buying habits, likes, and dislikes.  You now only have 1 shot and a couple of seconds to impress them with frictionless and secure customer experiences. 32% of consumers change their minds about making a mobile purchase by abandoning their carts. Getting this step right can potentially cut your mobile cart abandonment in half. A part of stress testing your site is assessing your checkout funnel and you can do so with the Mobile Optimization Initiative. This blog can get you thinking with a mobile-first customer experience mentality so that you are not missing out on your share in over $500 billion.

Smart A/B testing based on data-driven analysis gives you insights that lead to successful, simple changes that can have a big impact on increasing your revenue per visitor.

Benjamin Shapiro, Solutions Engineer, Redstage

Revenue Loss and CART ABANDONMENT

Key Take-Aways:

Doing it right the first time can save you the trouble in the end. Potential consumers and corporate buyers want to check out with ease, the sooner you begin simplifying the check-out process the better your site will perform The sooner you start, the better your site will perform. Better performance means staying one step ahead of your competitors.

How to Unlock More Mobile Holiday Revenue.

4. How to Defend Your Store from Cybercriminals

You have done your due diligence and can sit back and enjoy your holiday. Not exactly. While customers are increasingly shopping online, there is a huge risk that their data can be exposed. You may have heard of some common hacks such as phishing, payment fraud, and account take over.  With an expectation of a $22 billion loss this year due to fraud this section is a must-read. Here you will find the top 3 tactics hackers will use to attack your eCommerce site and how to keep your store and customers safe. We also joined forces with our trusted partner Trustpilot to give you 7 ways to improve your website’s trust signal.

Merchants need to start with an honest evaluation of what fraud costs your company. This isn’t just the money you lose on fraudulent orders you ship; it also includes all the time your staff puts into screening orders as well as the revenue lost to rejected orders which may have been safe. When you add up all these costs, the price of top fraud prevention solutions starts to look a lot more attractive.

— Oliver Sosinsky, Sr. Solutions Engineer, Redstage.

Revenue loss through payment fraud

Key Take-Aways:

Your customers deserve the same amount of protection as your store and protecting their privacy must be a priority. Monitoring is both crucial and necessary in keeping your customers and store safe. However, investing in a well-vetted Anti-Fraud Solution can ease your worries.

7 Ways to Improve Your Website’s Trust Signals.

3 Tactics Hackers Will Use Against Ecommerce Store Security This Holiday.

3 Stopgaps to Ensure Your Holiday Strategy Goes As Planned…

Ready or not, the holiday rush is coming, and it is up to you to properly prepare. B2C companies are rising at a steady pace and facing many challenges starting at the top of the sales funnel. However, B2B companies can learn a thing or two as they play a key role in ensuring B2C’s and their customers are benefiting from their product or services. Customers and their unpredictable demands and expectations are inevitableTo produce a safe, frictionless, shopping experience, both B2B and B2C companies must work in sync to increase conversion.

Whether it be online or a brick and mortar, your ultimate goal for this holiday season is to make a profit while increasing brand loyalty. If you want to stay ahead of your competitors here are 3 action steps, you should take.

  1. Learn more about the Mobile Optimization Initiative and sign up for a free consultation here.
  2. Schedule a free consultation to find out what testing feature is best for your site here.
  3. Schedule a consultation to find out which security bundle fits your site’s needs here.
Ghosts of Black Fridays Past: 3 Crucial Warnings for Retailers

Ghosts of Black Fridays Past: 3 Crucial Warnings for Retailers

Congratulations! You survived the Back to School retail surge. While the true test of eCommerce performance is yet to come, any hurdles you encountered during Back to School should be taken care of well before then. Consider these your warning shots. To help, here are 3 precautionary measures you can take to digitally strengthen your store for the holidays.

 

1. Stress Test to Avoid Lost Revenue

A wave of more than 6.2 billion shoppers will descend on digital retailers during Cyber Week. Unfortunately, not all businesses are prepared for success…

For example, J. Crew’s site crashed on Black Friday in 2018 and issues persisted throughout the afternoon. Analysts predict the outage cost the company around $780,000 in just five hours. Shoppers flocked to Twitter to complain en masse, causing a firestorm of anger to erupt across the web. This is where the real damage was done.  Like a ghost story from holidays past, this is a warning for retailers everywhere to change for the better.

 

Adam Morris, Redstage CEO

Redstage’s CEO Adam Morris identified the top “holiday rush” issues we’ve helped clients through in years past. Here’s what to watch out for:

1. Slow Site Speed

2. Price Caching

3. Broken or Buggy Checkout

4. Server Overload or Timeout

5. Add to Cart Features Failing

 

“The holidays are a time of increased profits, but that comes with a huge load on websites,” Morris says, “So if you haven’t done proper stress testing to account for higher demand, you won’t know how your online store is going to react.”Adam Morris, CEO at Redstage

 

Preparing for the worst now can save you money and your reputation later with one simple step— testing. Skipping this step could spell disaster that leaves the specter of poor service hanging over your reputation for years to come.

 

black friday, cyber week

2. Your Back-End Checklist at Present

From Thanksgiving to Black Friday through the end of Cyber Week, retailers have a few critical days to rake in as many sales as possible. During this shopping frenzy customers both in-store and online. Regardless of how they buy, your online store (or your app) will more than likely be their first stop. We developed a checklist of what you can do today to ensure your eCommerce site survives Cyber Week.

  1. Optimize your site’s user experience with A/B testing.
  2. Check your indexing to avoid price caching.
  3. Review all error codes to avoid a broken checkout.
  4. Avoid overload and crashes by scaling your server.
  5. Double-check key functions to avoid important features failing.
  6. Complete load testing to prepare for an increase in traffic.
  7. Utilize an automated monitoring system for real-time updates on 404s and checkout errors.
  8. Upgrade your payments and security platforms to prevent payment fraud.
  9. Lastly, be prepared to scale up your support team on the fly. If something goes wrong, even for a few minutes, you’ll need a sizable support team to manage angry customers and correct the issues.

 

“If you’re not using visitor data to identify the friction points in your checkout, you risk focusing your budget in the wrong places. A data-driven approach to optimization means trusting your analytics even when the message is counter-intuitive.”Oliver Sosinsky, Sr. Solutions Engineer at Redstage

 

Learn a valuable lesson from LuLu Lemon. Last year, the athleisure brand’s site went down the morning of Thanksgiving Day. Shopper outrage hit Twitter at 8am EST with a “Site is down. Ugh!”

In the first minutes of the shopping event of the year, the brand was stuck, entangled in crisis. Once the site got back online, more errors appeared, causing sales prices for in-cart items reset to regular prices or prevent customers from checking out.

With proper bug monitoring and back-end preparations, this fiasco could have been avoided. Take a page out of our book and start monitoring now. You’ve done the legwork to bring customers to your site, now protect it.

 

black friday, cyber week

3. Capitalize on the Future

A single visitor doesn’t guarantee a transaction and a single transaction doesn’t guarantee a loyal customer. Flawless mobile experiences will do both, but takes some serious testing.

Conversion rate optimization turns your visitors into customers while ensuring they receive an immaculate customer experience. While no two customers are the same, simple tests can lead to enhancements that remove friction from the checkout and dramatically reduce abandoned carts.

Merchants like LawnmowerTirestore.com took advantage of testing their site before the holiday season and the results were a game changer. By making their checkout button stick to the site’s header and follow users while they scrolled, sales soared with a 29.5% increase in revenue per visitor (RPV) for desktop customers. For mobile, the test yielded a 7% increase in RPV, after only 4 weeks of testing. Now, Lawnmower Tirestore plans to roll-out the feature site-wide to capitalize on their new-found data-driven advantage.

As part of the Mobile Optimization Initiative, retailers can receive checkout tests 100% free. The goal of the initiative is to create a set of best practices for mobile optimization and share our insight with the world. Read more about the initiative here.

 

black friday, cyber week, cyber monday

Final Thoughts

According to Internet Retailer, 60% of consumers plan to spend 50% or more of their holiday shopping online; spending over $21.6 billion during Cyber week.

It is not too late to prepare. If you start early enough and cover all the bases, you can sit back, relax and watch your revenue grow with measurably less stress. Remember, this is your holiday too. While there’s still time, monitor your site for bugs, load test, A/B test, utilize the data, capitalize on those results, and enjoy some eggnog.

Cheers!

How To Unlock More Mobile Holiday Revenue

How To Unlock More Mobile Holiday Revenue

No matter what, customers are always right. Today, they have more power than ever before. As you are well aware, it’s much more likely that your online customers interact with your website via smartphone than desktop. Therefore, their experiences need to be personalized, fast, efficient, and tailored for specific devices. If not, they’ll bounce to the next competitor for a better experience.

Statistics show that 40 percent of users will switch to your competitors after a bad mobile experience. A risk ALL merchants should avoid, especially with the stark rise in mobile sales. In fact, analysts predict that by 2020, 44.7 percent of all retail eCommerce sales will be generated through mobile devices.

Remember, your customers won’t stand for mediocre customer experiences. Your only job is to push them through the checkout in the most frictionless (and secure) manner possible.The digital experience should always mimic the desktop. A business buyer wants to be able to access or check inventory the same way during a commute or at an office computer. According to a 2018 Cyber Week report by Invesp, 32% of consumers changed their mind about making a purchase on mobile, abandoning carts packed with unsold products or sercives. It’s time for a change.

Why 2018’s mobile experiences left money on the table.

Last year, Black Friday’s sales turnout beat expectations by more than 10 percent. However, while many attempted to manage an anticipated mobile surge, conversion rates on the “favorite” shopping device came in dead last during Cyber Week. In the end, over $6.2 billion was spent online from Thanksgiving to the end of Cyber Monday. Mobile orders only accounted for 45% of sales. When you consider that mobile’s share of traffic was 62%, that’s a pretty weak conversion rate.

 In a world where responsive design is trying to give [customers] all the same functionality we have on desktop in mobile, there may be a divergence here where we have to start thinking about different mobile-first customer experiences. 

– Adam Morris, CEO, Redstage

Merchants and B2B companies who don’t start thinking with a “mobile-first customer experience” mentality will be left behind. Of course, it’s ideal to know and understand the buying habits of each customer, but tricky to do without the right technology. Thankfully, free data-driven A/B testing provided by the Mobile Optimization Initiative can help you overcome these barriers. Your customers aren’t going to wait for better mobile experiences, so why should you? Customers want to “click and go.” Lucky for you, implementing optimization is not only easy but the best option for B2B companies and retailers. B2B companies have a more complicated sales funnel that tends to increase aggravation and cart abandoment by 26%.  With the Mobile Optimization Initiative, merchants can increase completed purchases dramatically by improving customers’ mobile experience with simple tweaks. Here’s how it works.

The Mobile Optimization Initiative is the ultimate holiday tool!

Last year, we published several articles about mobile optimization to help merchants close the “mobile revenue gap” by optimizing checkout experiences. With some of the tests we’ve run, retailers can cut mobile cart abandonment in half or more on certain devices.

Optimizing your customer experience thorough data-driven optimization allows you to discover small tweaks that ensure you’re capturing as many sales as possible from the growing pool of mobile buyers.

– Benjamin Shapiro, Solutions Engineer, Redstage

Those who join the MOI program with Redstage will receive a free checkout funnel assessment, custom test design, experiment implementation, and professional services during the active program. The goal of our global initiative is to help merchants get more revenue from mobile. In turn for the free services, we gather anonymized data about customer habits to create a knowledge-base for best practices in mobile. Learn more about our community proven experiments and sign up here. As the results show, it’s well worth it.

With the current data collection and analysis tools available, we no longer have to speculate on where to put efforts to improve your site. The data is the guide in both where to focus your efforts, and where to expand after experimenting. Smart A/B testing based on data-driven analysis gives you insights that lead to successful, simple changes that can have a big impact on increasing your revenue per visitor. One recent participant – A lawn mower tire store – saw lifts of 24.9% and 7% RPV on desktop and mobile respectively through a‘sticky cart’ test.

–Benjamin Shapiro, Solutions Engineer, Redstage

How Soon Should You Start?

The sooner you begin, the better. Participants start gathering testing data immediately, and all it takes is adding a simple tracking tag to your site (less than a minute). If you’re looking for a last-minute boost for your holiday marketing, this is it, and it packs a punch. Our latest test yielded a 25% increase in revenue per visitor.

The Mobile Optimization Initiative puts you ahead of the competition, because the experiments are proven, having been tested over millions of transactions across hundreds of merchant sites.As of December of 2018, experiments from 120 merchant sites generated a collective $22 million in revenue, averaging a 9.28% increase in RPV (extra revenue they would’ve missed without MOI testing). Today, we leverage the data from more than 200 participating merchants to ensure your tests are optimized for success. From this, we’ve created more than 130 standardized experiments to test, so now’s the time to join!

We were struggling with mobile conversions and the MOI program helped us with the insights and adjustments we needed. This data-driven, forward-thinking program is certainly worth a try.

– Digital Marketing Coordinator @ Lawnmower Tire Store

Final Thoughts:

Ignoring the trends means you’re missing out on your share of over $500 billion in online sales. With 95% of mobile devices being used to look up local information to visit businesses, it’s your business they should be checking out (pun intended). By this time next year, we expect the number of participants in the MOI to double again, which means it may be too late to get a leg-up on your competitors. Since the experiments work best during high-traffic periods, there’s no better time to test! And don’t worry, the tests automatically notify you if they’re not giving you positive results.

If you’re still not convinced, or don’t know where to start, check out the latest results, case studies, and strategies in our new Holiday Mobile Optimization Ebook here! Good luck this holiday season! Want to learn more about the initiative but before you sign up? Contact us here for a free consultation with our testing experts.

What Prime Day Can Teach Us About Holiday Sales

What Prime Day Can Teach Us About Holiday Sales

Prime Day is Over, but Holiday Sales Have Only Begun

If January is the finish line for holiday sales, Amazon’s Prime Day is the starting gun. This year brands came out in force to compete and capitalize on the sales event. Flexing omnichannel marketing muscle, both digital natives and big-box stores sought to grab their share of winnings. Most importantly, the performance-enhancing tools both Amazon and others used on Prime Day can be repurposed for the holiday race ahead. Let’s review.

 

Quick Recap: Prime Day Milestones

This Prime Day, the ecommerce ecosystem got more than it bargained for. Brands broke through the clutter with new strategies to piggy-back off the holiday, while others launched their own sales events. Amazon’s reported sales for the two-day event beat last year’s totals for both Black Friday and Cyber Monday combined. According to Internet Retailer, “The ecommerce giant sold more than 175 million items across its platform. Plus, sales by third-party marketplace sellers ‘far exceeded’ $2 billion.” However, Amazon wasn’t the only winner.

Last week, Adobe Digital Insights discovered a massive industry shift. Data shows that average daily revenues for retailers with revenues over $1 billion saw lifts of 54% and 72% Monday and Tuesday, respectively. The report concludes that mid-sized retailers shared the gains, witnessing an average revenue bump of 28%.

The two-days of sales also mark a notable shift in the industry at large, pushing the entire category to new highs. Thanks to this month’s 1.7%  increase in sales across the online retail industry, non-store retailers (including Amazon and digital-only stores) now only trail Auto dealers in the U.S. retail market. As Bloomberg notes, “Online shopping has become the second-biggest chunk of the $520 billion U.S. retail market, after overtaking grocery stores and restaurants in June.”

 

How Amazon Became a Crowd Favorite

From free shipping to premium content, Amazon Prime members get an awful lot of added value. For an annual price of $119 (or $59 for students), users get unlimited music and photo storage, audiobooks, Kindle books, discounts at Whole Foods, and Prime Video where they can watch their favorite movies and shows.

The loyalty program also gives special deals to users, including early access to lightning deals 30 minutes before non-members. Additionally, Prime members can even share their benefits with other members of their household (or anyone for that matter). One of the newest features, Prime Wardrobe, allows loyal members to ship up to 8 clothing items from Amazon sent right to their door, and they can return any and all items for free.

The result of this massive loyalty program? Membership now exceeds 100 million subscribers. At the end of 2018, Consumer Intelligence Research Partners (CRIP), determined the average Prime member spent $1,400.00 on Amazon goods for the year, more than double the $600.00 that non-prime customers spent on average. 

 

Building Your Fanbase Through Loyalty Programs

Users expect more from brands and online vendors. They want value beyond the products they’re buying and an interface that makes for swift shopping. Most, if not all DTC companies acquire the bulk of their new customers for the year during the holidays. The problem is engaging these customers and retaining them once the ball drops on New Year’s Eve. A loyalty program built specifically for your audience can help you keep the sales flowing and boost retention year-round.

The question is, how does your current loyalty program achieve this, and can it be optimized? Are there additional “freebies” you can provide outside of the occasional blog post, up-sell, or discount? In ecommerce, brand loyalty can be a massive differentiator between you and your competition. While Amazon’s loyalty program is difficult to match, exclusive deals, early releases, customer perks, and unlockable rewards are great ways to keep customers engaged and coming back.

If your rewards program was based on a subscription payment, how much could it cost to provide free shipping for customers? Perhaps rolling revenue would allow you to create new content for members like style guides, product videos, or pop-up events like Amazon’s Treasure Truck. Rewards programs like Swell even reward customers for creating content like product reviews, videos, Instagram photos and more, which in-turn drive additional revenue. For the holiday’s it’s time to think seriously about the value of customer loyalty.

 

Using Amazon To Your Advantage

Amazon offers benefits to sellers who use the platform, including specific advantages for Prime Day. Omnichannel merchants can submit for a lighting deal, which if approved, puts the platform’s marketing engine to work for you. Sellers who are selected for the option typically see a big boost in sales, though significantly lower prices are recommended to get approved (at least 20% off the current Amazon listed price and at least 5% lower than the lowest listed price for the same product in the past 28 days). 

Amazon coupons are another example of some of the benefits sellers can use to get some extra juice out of the Prime Day frenzy. The coupons show up in search results, on the Amazon Coupons page, in the shopping cart, in your brand store, and in sponsored products listings. This year, many merchants combined these strategies with an increase in marketing budget to get their products seen and to the top of specific categories, but only with product that were performing well already. 

Companies that sell consumable products have a massive advantage. Amazon’s subscription feature lets customers sign up for automatic rolling purchases that will keep sales going long after Prime Day. Using this option in combination with those mentioned above will likely prove powerful for merchants who sell on Amazon, and makes a compelling case to add subscription functionality to your ecommerce site. Our developers recommend using this extension here for Magento 2.

 

The Sales Race Ahead

Vendor beware, Amazon is currently taking steps to build it’s own collection of private-label brands. While the deal may seem outrageous, the “Amazon Accelerator” program offers free marketing support, preferred listings, and more perks for vendors. The catch? Amazon reserves the right to purchase brands that sign up for as little as $10,000 flat (WSJ). Most brands would agree this is a ludicrously unfair price for an entire product line. However, it’s likely one or two tiny companies in each category will part with a brand for the fast cash-grab before they’re bought.

While we don’t advise tossing your hat in the ring, this is a gentle reminder that competition for selling on Amazon will only increase, and you can bet the brands Amazon plans to snatch up will receive preferential treatment. Then again, if you’re a retailer or reseller with the ability to create a new brand quickly, it might not be a bad idea to sign up.

 

Final Thoughts

This Prime Day, brands proved a decisive ability to compete against Amazon. While some profited by selling on Amazon, others kept customers close by hosing their own sales events, focusing on mobile optimization, or pumping up their marketing budget. The road to beating Amazon isn’t easy, but these successes point to new ways to match the giant’s might (or at least profit from it).

Customer loyalty is just one area where merchants can improve their overall experience and prepare the holidays ahead. Whether you manage a B2B or B2C operation, there are likely tools and strategies available you haven’t thought about. Grab our free Power Index for insights on how to improve even the strongest tech stack and keep customers coming back long after the holiday season.