Amazon's 3 Areas of Weakness Retailers can Capitalize On

Mike Lapchick
by Mike Lapchick 06 Jun, 2016

Over the past decade, the world of retail has been turned upside down.


Companies like Walmart and Costco have streamlined cost structures and supply chain efficiency, and purely Internet retailers like Amazon have changed the way we buy things online. However, despite being the market leader in the world of online retail, Amazon isn't perfect.


The company, which has long prioritized investment in future growth over profits, might have been focusing on the wrong areas. The Internet giant generated revenue of $107 billion in 2015, but left itself vulnerable in three main areas moving forward.



1. Amazon offers poor product information for its customers


One of the best things about Amazon when it was in its infancy was its guidelines for sellers - only brands could sell as brands. That isn't the case anymore. Now, individual sellers can act as brands, and use product information that doesn't match their products.


In an internal study, we found that poor product content has a serious impact on a business's bottom line.


First, 40 percent of consumers have returned a product due to poor product information.

Second, 87 percent of consumers would be unlikely to shop with that brand again that provided inaccurate product information for a product they purchased.

Third, product content can cause one of the most frustrating issues for e-retailers: the dreaded abandoned shopping cart. In fact, 30 percent of consumers reported that poor product content caused them to abandon their shopping carts online.


If information about products isn't complete and up to date, consumers will never become lifetime consumers, the retail holy grail.



2. Amazon's suppliers use paid product reviews


When consumers are uncertain about a product, they turn to other sources for information. One of the most credible other sources on Amazon used to be product reviews, where actual customers would post valid reviews about products.


However, the proliferation of paid reviews in exchange for free products has become a major issue in the Amazon world. Fortunately, Amazon recognizes this issue and has recently taken action with a series of lawsuits against companies and individuals who post fake reviews in exchange for money.



3. Amazon lacks an in-store touchpoint advantage


Omnichannel retailers can provide a consistent experience by owning the entire shopper journey, from browsing to delivery, both in store and online.


For consumers who have questions that can't be answered online, the ability to go in store is a fundamental advantage many brick-and-mortar retailers are leveraging.


This consistency is especially important for fresh grocery deliveries, which Amazon is struggling to implement with its Amazonfresh service.