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Here’s What E-Comm Execs Think About Amazon and Digital DTC Startups

Competing with Amazon can seem like an impossible task, but a new survey of e-commerce business leaders has uncovered a surprising confidence that the tech giant can be beaten at its own game—loyalty and fulfillment.

A survey by digital marketing firm Wunderman Thompson found that three businesses, with Amazon chief among them, are believed to represent the greatest threats to e-commerce, according to the 503 U.S. and U.K. senior e-commerce decision-makers polled throughout October 2019.

When posed the question, “Who is your biggest competitor in digital commerce?” most brands 934 percent) answered Amazon. This was twice as high as the second choice—brand-operated websites—at 16 percent. Chinese B2B marketplace Alibaba also registered 14 percent of the vote, with eBay rounding out the top choices at 10 percent.

“To put that in perspective, a majority of digital commerce decision-makers (58 percent) in the U.K. and U.S. view just three sites—Amazon, Alibaba and eBay—as posing more competition to their business than all the retailer sites and all the D2C brand sites in the world combined,” Wunderman Thompson head of thought leadership Hugh Fletcher wrote in a blog post detailing the survey’s findings.

But that doesn’t mean that these business leaders despair of their condition. According to Wunderman Thompson, most of them are quite confident they can compete with the tech-centric companies in a few different areas. The main area in which Amazon lacks strength, said 27 percent of all leaders surveyed, is loyalty. More digital commerce decision-makers (12 percent) pegged loyalty as the area where they could be more competitive than their rivals.

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Even if loyalty isn’t Amazon’s strong suit—an idea pushed further by the respondents who said Amazon doesn’t create a “sense of community” (19 percent) and those who said it doesn’t “stand for anything as a company” (18 percent)—the survey’s data still showed a clear respect for the power of Prime.

“What makes this slightly surprising is that our respondents were in little doubt that Prime is Amazon’s most potent weapon in the market, the key point of difference that allows it to stand out from the competition,” Fletcher said. “Despite the confidence over loyalty, more than three in five commerce leaders (62 percent) we spoke to said Amazon wouldn’t be as successful as it is without Prime, and 61 percent said their own organization missed out from not having a similar service. Nearly three quarters (71 percent) said Prime was essentially a CRM program, which at least puts it in the same category as loyalty.”

This reality is likely why 19 percent said they planned on increasing investments in Amazon-like fulfillment over the next 10 years. Although 66 percent admitted to altering their delivery strategies to compete with Prime, another 24 percent said fulfillment was also an area in which Amazon could improve.

Regardless, Wunderman Thompson’s data shows that loyalty programs could still emerge as a major weapon against the digital leader. A 2019 survey conducted by the firm found that 26 percent of consumers would consider shopping elsewhere if they were provided a loyalty program that could compete with Amazon.

When asked what they would prefer in a loyalty program, 70 percent said they would like to receive free samples and gifts based on their purchase history and another 55 percent said personalized offers were important to them.

The problem is the “What Amazon Can’t Do” category is still a short one, according to the firm, even when including loyalty. But that doesn’t mean there aren’t more areas to gain ground. For example, 24 percent of the e-commerce leaders surveyed said that Amazon’s packaging was either too plain or not sustainable enough. Overall, sustainability was pegged as one of Amazon’s weak points, with 21 percent of those surveyed in agreement.

“There is a school of thought that the best way to take on Amazon is to create a brand identity that establishes clear lines of difference with it, and that sustainability and values are ideal places to start,” Fletcher said.