What Amazon’s 1-click Checkout and Walmart’s Deliverability Can Teach eCommerce Merchants
Amazon’s transition from a used book reseller to an online marketplace has allowed millions of individual sellers the opportunity to jump on the eCommerce bandwagon. The evolution and raging success of the eCommerce giant has influenced industry-wide omnichannel business practices, consumer expectations and shopper behaviors. Everything the company touches seems to turn to gold. Competitors, Walmart in particular, are constantly nipping at their heels and all eCommerce merchants can benefit from observing the trajectory of growth and the logistical challenges of both behemoths, Amazon and Walmart.
Amazon’s dominance in the eCommerce space far surpasses that of any other company. Amazon sales comprise 40% of the US eCommerce marketplace. While Walmart ranks second, Amazon’s share ($408.19B) is more than the combined earnings of the nine retailers that hold positions 2-10.
Amazon’s huge consumer appeal is often attributed to its 1-click checkout that has revolutionized the checkout experience. 77% of consumers surveyed by CSA Research prefer shopping on Amazon to any other retailer citing a frictionless user experience and expeditious checkout as the reasons for their store preference. However, while Amazon may have won the early days of one-click checkout, the growth of their eCommerce sales are currently stagnant. This may be due to supply chain issues and their trouble predicting an exact timeline for item delivery.
Walmart, with its 4,700 stores nationwide, is adapting its eCommerce strategy to begin using its stores as launch pads for delivery drones and departure locations for direct-to-fridge drop-offs. This, in addition to setting up each store to begin serving as a local fulfillment center for eCommerce sales, may give Walmart an edge over Amazon. Walmart also has plans to start packing and shipping third-party sellers’ goods from stores. With 90% of Americans living within 10 miles of a Walmart store, orders can be fulfilled in the quickest time and travel the shortest distance possible.
While improving delivery timetables is sure to benefit Walmart’s market share, time will tell if these measures will be enough to lure customers away from Amazon, or will Walmart need to put equal focus on improving the eCommerce journey from shopping to checkout. Research indicates a 110% increase in consumers seeking a more seamless customer experience (CX).
Removing friction, improving the user experience (UX) and meeting customer delivery expectations seem to be key points in feeding eCommerce sales growth. All eCommerce merchants can take note of these objectives and implement best business practices to achieve these goals.
Learning from the success of Amazon’s 1-click checkout should compel eCommerce businesses to rethink the importance of removing friction during the checkout process. Research by Baymard Institute predicts that the current 70% cart abandonment rate can be significantly reduced by removing friction and expediting the customer journey. Offering shoppers a checkout option that does not involve creating an account or recalling a password can prevent 35% of checkout abandonments. Most significantly, research indicates that 44% of eCommerce shoppers choose where they shop based solely on the checkout experience.
Retailers can also improve customer experiences by ensuring that their fraud prevention strategy doesn’t reject legitimate customers due to suspicions of fraud or cause them undue friction. Fraud protection practices, such as manually reviewing orders for fraud, can also lead to checkout and fulfillment delays that can hold up deliveries and further agitate customer relationships. Effective fraud detection and prevention should assist merchants in identifying customers quicker and with less identifying information, not more. This will allow retailers to improve customer experiences and offer seamless checkouts.
While Amazon and Walmart compete for dominance over eCommerce sales, eCommerce businesses of all sizes can observe their successes and challenges and improve their bottom line by learning from the industry leaders.
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