Amazon has topped Retail Week Indicator as the ecommerce giant continues to refine its digital capabilities

The key to Amazon’s overall success is understanding how customers are shopping and being responsive to changing shopping habits. It is not content to follow the crowd; its culture of innovation means it will lead the pack and give customers a shopping experience they didn’t even realise they wanted.

Same-day delivery, personalised product recommendations, even drone delivery – Amazon invests to make sure it’s ahead of the curve.

Amazon tops Retail Week Indicator followed by H&M and John Lewis. Retail Week Indicator is an in-depth study into the customer shopping journey of 176 retailers in the UK. The audit of front-end digital capabilities crosses four categories – marketing, logistics and customer service, cross-channel and ecommerce – which offers a 360-degree view of which retailers are winning in which areas, and where others need to improve.

From looking at who offers a simplified account log-in online, to whether same-day delivery or voice search technology is available, we reviewed over 30,000 data points to develop Indicator’s digital capability ranking.

Here are five reasons Amazon is UK retail’s digital leader:

1. Prime

Subscription service Prime is at the core of Amazon’s growth strategy and helps it achieve the holy grail in retail: boosting repeat purchase.

Amazon Primer

More than a quarter of the British population have an Amazon Prime account

Amazon Prime members are estimated to spend double that of the average non-member each year, according to the Consumer Intelligence Research Partners.

And it has lots of Prime members to entice to buy more. According to Mintel, Amazon Prime has 15 million members. This means 26% of the British population have a Prime account while a further 13% share access through someone else’s account.

The subscription gives users unlimited one-day deliveries on hundreds of items, plus access to video and streaming services, combined with its vast product range, which is a big incentive to buy through Amazon rather than visit other websites or through brands directly.

Mintel associate director of retail Nick Carroll says Prime members tend to spend “significantly more” and shop “across a broader number of categories”.

2. Delivery options

Amazon is able to monetise its delivery with Prime because its delivery is so good. In fact, it tops Retail Week Indicator’s logistics ranking.

Amazon offers same-day, 90-minute, next-day, nominated-day, Saturday and Sunday and evening delivery. Basically, anything the customer could want, Amazon delivers.

It also offers a wide range of click-and-collect options, including collecting from Amazon Lockers, of which there are 2,200 in the UK, Doddle and the Post Office.

Its communication around delivery is also exemplary. Customers are texted details of their order and delivery times and even send a photo on delivery if the package is left unattended

Amazon lockers

There are 2,200 Amazon Lockers in the UK

Search is a fast-evolving part of retail, with the business investing in new technologies such as voice and visual to help shoppers get to the items they want to buy as quickly as possible.

Amazon gets the simple things right, such as autocomplete and suggestions of search terms as the customer types but has also been a pioneer of both voice and visual search, allowing people to search via a voice direction or take a photo of the product they want.

The online giant also allows customers to scan the barcode of a product, be it one they’ve already purchased or perhaps one they’re considering purchasing in a bricks-and-mortar store, to find it immediately on Amazon. This enables speedy price checking or purchase.

Alexa Echo Look

Amazon has been a pioneer of visual and voice search

It pays for Amazon to be great at search as it is actually the biggest search engine in terms of product search. According to marketing analytics firm Jumpshot, Amazon accounts for 54% of product searches and it already has a fast-growing advertising business with revenues of $10bn last year, monetising its strength in search.

Google UK director of retail and technology Martijn Bertisen says this could become a wider trend in retail as brands and retailers monetise their audience to create their own media businesses.

“In the US, Walmart, Target and Best Buy have set up significant media businesses to monetise not just their owned and operated assets, but ultimately monetise their users,” he says.

“All of a sudden you’re running a new revenue stream at a 30% to 40% margin versus the 3% margin in retail. In the next couple of years, big retailers will be thinking about transforming their media teams.”

4. Personalisation

Amazon has long been the king of personalisation and naturally achieved full marks on all personalisation metrics on Retail Week Indicator.

It offers a personalised homepage and recommendations based on a shopper’s buying and browsing behaviour, as well as current events such as Easter or the return of Bake Off on TV.

If customers click on a product page, they will see a cross-selling message – “customers who bought this item also bought…” – and as they browse the site they are continually shown relevant banners and recommended items that they may have previously looked at but didn’t buy.

The personalisation is layered on at every stage of the shopping journey. The experience is personal, customised and designed to push every selling opportunity available.

5. Customer service

A strong customer service offer is critical in the world of pureplay retail and Amazon has one of the best.

The vast majority of problems can be solved by customers themselves as Amazon’s website lets people find out where their items are, request a refund or contact the seller at the click of a button. But if they require further assistance, customers are automatically transferred through to Live Chat.

The Live Chat function uses AI to respond to queries quickly and uses a simple decision tree – giving customers multi-choice questions – to determine what the issue is.

The bot doesn’t use natural language processing or try to hoodwink the customer into thinking they’re speaking to a real person. It’s not trying to sustain a live conversation with the customer but simply resolve their query as soon as possible.

It is deeply effective and lots of retailers could learn from the simplicity of Amazon’s chatbot.