First off, this is not about keeping up with the Joneses for appearances sake. It’s about understanding what your goals are as a business, and being aware of what your competitors are up to make sure you’re providing a user experience (or product/service) that’s ahead of, or at least on-par, with theirs.
Whenever possible, it’s best to be the innovator. The business that rises above the rest — who puts other players in your market “behind,” in need to catch up.
Amazon is an excellent example of this. What they’re done with range of product, price and delivery has transformed retail, and many businesses have been left behind because of it.
For today’s blog post, let’s focus on delivery of goods, which is directly related to user experience (UX).
For this case study, let’s put Amazon up against Barnes & Noble.
I’m a Barnes & Noble member, which gives me privileges like in-store discounts, occasional member coupons — and super slow free shipping, which usually takes about a week. In fact, I just ordered two books (I love books) and one is scheduled to deliver 6 days after I placed the order, the other 7 days after.
I’m also an Amazon Prime member, and when I order a book I receive it in just two days (sometimes one).
On both BN.com and Amazon.com, the price is usually the same. The product is the same. My user experience in these two areas is the same …
… But to wait at least 3X longer for delivery of the same book? A horrible UX that’s so bad I am unlikely to ever order a book from Barnes & Noble online again. Even a coupon, which saves you a few bucks, isn’t enough to overcome this poor experience.
And it all could be avoided.
Barnes & Noble has been selling books for far longer than Amazon has been in business. They’ve got experience no other book seller I know of has. They’ve got a great selection of books (just like Amazon) and good online prices (just like Amazon), so somebody has been paying attention to the online market and adjusting nicely.
But what about that shipping? why isn’t it on par with Amazon, and HOW MUCH BUSINESS DOES BARNES & NOBLE LOSE on a daily basis because of it?
Years ago, when I worked for a major online clothing company, I found out that they paid a flat monthly fee for all of their UPS shipping. No matter how many garments, shoes an hats they shipped, they owed UPS the same amount. They are not the only large business that does this.
I’m going to make an assumption that Barnes & Noble has a similar deal with UPS. Amazon, too.
So why isn’t Barnes & Noble staying competitive with their shipping time?
One argument could be that Amazon Prime, the $100 service you need to buy in order to get two-day shipping, is considerably more expensive than Barnes & Noble’s $25 membership. But with Amazon Prime you also get Prime Movies, Prime Music and Prime Pantry (which makes them an innovator that offers incredible value for only $100 a year).
OK, so this is not an apples to apples comparison, but someone at Barnes & Noble should be figuring out what that membership fee needs to be so they can be competitive with Amazon’s shipping speed. And then they need to show the value of the increased price.
Maybe something like:
“Free two-day shipping on just about everything for only $49 a YEAR — along with no-hassle, free returns and special member-only coupons for all your favorite things.”
It’s the age old question of value, and in this day-and-age most of us value speed — on our phones, our computers and our shipping.
The user experience you provide has a direct relation to your company’s annual profit (or loss). The best choice is to be the leader in your industry that everyone else has to catch up to. If you’re not in this position, are you losing money because you can’t keep up?