COMMENTARY

The changing world of retail: 4 ways to defend against Amazon

Jan. 9, 2018
The changing world of retail: 4 ways to defend against Amazon

Photo: iStock.com

By Jeff Anulewicz, executive strategy director, MXM

 Retailers, both online and offline, continue seek the solution to cracking Amazon's dominance of the retail landscape. This need has become much more urgent as Amazon has set its sights on offline retail. Since 2015, the online giant has opened a half dozen bookstores and its first New York City location. Amazon also spent $13.7 billion on acquiring the Whole Foods grocery chain in 2017.

And just as Amazon seeks to move from the online world into the offline world, we're seeing many brands traditionally seen as brick-and-mortar retailers — such as Walmart and Target — continue to expand their online presence. 

Online shopping offers a wealth of benefits to consumers, with vast product selection and convenience first among them. Ultimately though, this isn't a debate about which channel is more effective. This is about consumer expectation. And their expectation, as usual, lives in both of these online and offline worlds simultaneously, for despite the ease of online shopping, consumers still crave the tactile experience of a physical store, particularly for major purchases.

Here are four ways retailers can immediately address consumers expectations, offering the type of retail omnichannel experience that consumers expect:

1.      Integrate local inventory online

Picture this: You're about to head out to a birthday party and realize you have forgotten to get a gift. With only an hour before the party, Amazon isn't an option. Ideally, you could buy what you need from your local store's website and then hop in your car and pick it up there. But too often, you have no easy way of finding what's actually available in your local store and good luck getting someone at the store to pick it off the shelf and gift wrap it for you so you can pick it up in 30 minutes. That's the kind of service that brick-and-mortar retailers need to deliver to engender loyalty and compete with the Amazons and Zappos of the world though.

2.      Process online returns in store

Another edge brick-and-mortar retailers have over Amazon is that if you bought an item online and had to return it, you could just drive to your local store instead of mailing it back. Well, in theory at least. Many large retailers still have a division between their brick-and-mortar and online operations, which makes this type of opportunity impossible. A Gartner survey last year found that just one third of retailers had fully integrated digital into their operations. Some retailers, like H&M, have begun offering this service though. Another example of this is Bonobos. The men's clothing retailer, recently acquired by Walmart, opened a store in Manhattan in 2015 (there are now three) that acts as a "showroom for clothes." Consumers can try on clothes and have them shipped to their homes for free. You can also bring your returns to the store.

3.      Carry your consumer experience across both the physical and digital worlds

Automation should free human workers to offer more high-touch services. But despite the prevalence of self-checkout kiosks, it's still the norm to enter a store and be unable to flag down a salesperson. Or when you get someone's attention they often tell you that this isn't their department and you need to talk to someone else. Worse, after doing your online research, you end up knowing more about the product than the salesperson. While it may sound obvious that informed sales associates will help retailers ring up more sales, the scope of this effect can be enormous. Consumers who have already checked out products and competing brands online spend up to four times as much when they're assisted by a knowledgeable sales associate. Some retailers, like Apple, know the value of having informed sales people on the floor. Apple also realizes that if such employees carry a tablet that they'll be able to answer any question a consumer throws at them. Similarly, Best Buy recently educated its sales associates on the latest technologies, like VR and smart home appliances. The store also has trained support staff that can install technologies in consumers' homes and offer consultations about tech-buying decisions.

4.      Use stores for more than selling

Another tip from Apple Stores is to use the location for education, not just for selling. At Apple Stores, you can learn how to take photos with your devices, learn the basics about how to operate your Mac and discover how they can be used for art and design projects. Apple's not the only retailer that realizes that stores can be a focal point for learning. The Home Depot regularly hosts workshops on learning new carpentry skills for home improvement projects. Some brands don't even sell anything in their retail spaces. Samsung's new store in New York's meatpacking district is more like a museum, "celebrating creators who break barriers." Ford's new hub beneath New York's World Trade Center displays the carmaker's futuristic technologies.

Some of these tips may seem beyond the immediate capability of traditionally brick-and-mortar retailers. Some, like reeducating staff, are long-term commitments that conflict with quarterly goals. The urgency is real. If Amazon's rivals continue doing business the way they have been then Amazon will keep moving in on their territory. Without an omnichannel solution, brick-and-mortar retailers may well find that they don't have any moves left.


Topics: Assisted Selling, Augmented Reality, Consumer Behavior, Customer Experience, Customer Service, eCommerce, Marketing, Merchandising, Omnichannel / Multichannel, Online Retailing, Retail - General, Technology, Trends / Statistics

Companies: Amazon


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