Retailers of all shapes and sizes are struggling to survive in the era of Amazon. Headlines echo very clear distress signals in the form of missed revenue targets and mass shutterings of physical stores, all trying to gain a firmer foot in the uphill battle against the ecommerce elephant in the room – Amazon. Yet no type of business is struggling harder than mid-market brands and ecommerce retailers. While this can be attributed to many factors, it’s in large part due to changes in consumers’ ecommerce expectations, driven by Amazon’s investments.
Two pain points in particular – scalability and profitability – are becoming increasingly more necessary to achieve a competitive advantage over Amazon. In addition to these two factors, ecommerce retailers are faced with a myriad of issues – from meeting customer expectations on inventory, shipping and delivery costs, to building customer relationships that result in return buyers. All of these problems, however, aren’t unique to mid-market brands and retailers. Larger online retailers are suffering from many of the same complex problems. The crucial difference is the mid-market lacks the resources the bigger players have to overcome these challenges.
Essentially, it comes down to a few key areas that retailers are falling short of that explain why Amazon is capturing nearly half of all dollars spent online.
The Fate of an Inadequate Ability to Scale
One of the least discussed shortcomings among eCommerce retailers, yet the most critical, is the ability to scale. It’s arguably one of the only variables that matters in the ecommerce equation right now. Many retailers are faced with building an infrastructure that’s capable of competing with Amazon and adaptable enough to handle the surges of peak while delivering a great customer experience all year. This starts with figuring out how to adequately scale up in order to deliver against the precedent Amazon has set in redefining consumer expectations.
Retailers Must See the Bigger Picture