How Retail Stores Can Compete with Amazon
YOUNGSTOWN, Ohio — Almost half of all online spending in the United States occurs on Amazon, a survey by BigCommerce reports. Indeed, 83% of American consumers have bought something on Amazon in the last six months. How can a small, brick-and-mortar retailer hope to compete?
First, a reality check: 87% of retail sales still occur in brick-and-mortar stores, according to Deloitte. Although Amazon may account for nearly half of all online spending, that adds up to about 5% of U.S. retail sales, which leaves plenty of opportunity.
Here’s how brick-and-mortar stores can compete with Amazon and not only survive, but also thrive.
Learn from Amazon
Why do consumers love Amazon? Convenience is key. Amazon offers a shopping experience that’s convenient, fast and personalized. Here’s how to do the same:
• Offer click and collect. If you sell products online, give customers the option to pick up their online purchases in-store. They can get their items faster without paying for shipping. (Plus, they’re likely to spend more when they’re in the store picking up their orders.)
• Accept a wide range of payment options. Shoppers want to pay in the way that’s most convenient for them. Millennials, in particular, want to pay with their phones to speed up the checkout process. Speed things up even more by using tablets and smartphones to accept payments throughout the store, so shoppers don’t need to wait at the checkout counter.
• Get personal. Almost two-thirds of consumers in a recent survey want personalized recommendations from retailers and 79% say personalized service from retail employees is a key factor in where they shop. Use retail loyalty software to track what customers purchase and which marketing offers they respond to. Then reach out to them with tailored offers or specific products they’ll like. Nearly half of retailers that gather customer data fail to communicate it to salespeople, BRP reports. Share what you learn with employees so they can provide personal recommendations, too.
Partner with Amazon
Instead of fearing Amazon as an enemy, enlist them as a partner. Half of all products purchased on Amazon last year were sold by third-party companies, according to Amazon’s 2018 Small Business Impact Report. Setting up a store on Amazon’s marketplace can not only boost sales, but also generate traffic to your website.
Almost one-third of shoppers in BigCommerce’s survey have bought a product at a brick-and-mortar location after discovering it on Amazon. Shoppers still like to see, touch and test merchandise in person before they buy. So use your Amazon store as a digital showroom to get customers in your door.
Do what Amazon can’t do
Focus on areas where Amazon falls short:
• Curation: Many shoppers find the sheer volume of products on Amazon overwhelming. Sorting through 10,000 different results for “women’s black T-shirts” is the opposite of convenient. Brick-and-mortar shops can compete by curating a manageable selection of products that saves shoppers time and headaches.
• Uniqueness: While Amazon may be a great place to find low prices, it rarely delivers those delightful moments of discovery that shoppers love. Offering unique products can give you an edge over Amazon’s mass-produced wares. Nearly four in 10 Amazon shoppers say they would go elsewhere to shop if a retailer offered unique items they couldn’t find anywhere else.
• Enjoyment: “Amazon is great for purchasing, but not for shopping. They’ve taken the touch and soul out of shopping and made it simply transactional and functional,” says Natalie Berg, coauthor of “Amazon: How The World’s Most Relentless Retailer Will Continue to Revolutionize Commerce.” says.
“That’s a weakness that brick-and-mortar retailers [can] exploit,”she adds.
Berg recommends brick-and-mortar retailers focus on what Amazon can’t do. “Put more personality into [your] store. Stores are transitioning from the transactional to the experiential. The store of the future will be a place [where] consumers can eat, play, work, learn, discover and borrow things.”
SOURCE: Kimco Realty Corp., a shopping center operator based in New Hyde Park, N.Y.
Copyright 2019 The Business Journal, Youngstown, Ohio.
Published by The Business Journal, Youngstown, Ohio.
CLICK HERE to subscribe to our print edition and sign up to our free daily headlines.