How Brands and Retailers can Compete with Amazon
By Logicbroker | April 10, 2017
Amazon is constantly at the forefront of ecommerce. Whether it be effectively implementing free two day shipping (for a fee) or offering the largest variety of goods, often at the lowest prices – Amazon reigns supreme. Amazon has changed the way we shop and there has been a huge impact on other retailers – particularly brick and mortar. However, savvy retailers are finding ways to fight back with the most surprising advantage.
Ironically enough, the shopping medium that has been hurt the most by Amazon is the exact benefit retailers have against it – their brick and mortar storefront. While Amazon is building out huge warehouses in more locations to increase delivery speed time, retailers can use their local store for local shipment or leverage in-store pick for faster order completion. One hurdle retailers have encountered is the fear that their stores are not trained to ship. However, that is largely a misconception, as that they are not turning their stores into distribution centers. These retailers will likely not be shipping thousands of orders a day from each store. They will be shipping 5-10 orders for products that are already inventoried in these stores.
Think of it like this – shipping direct from store is much like the typical customer purchase style, although instead of a customer walking into the store, browsing, and bringing their items to the register for purchase and bagging the order comes in electronically and a store employee would pick each ordered inventory aisle and package in a shipping container with appropriate shipping labels and postage. The final step is to drop the package(s)in mail or have an Uber or Lyft driver pick them up for delivery.
The key for traditional retailers is to think outside the box, take risk and execute flawlessly. Amazon is constantly brainstorming new ideas, and to stay competitive, traditional retailers will need to too. There is a great opportunity for omnichannel retailers, as they give their customers numerous ways to interact with their store. When a store wins over new customers, they will increase inventory turn and store-comp. Imagine if a retailer has 2,000 stores and process 10 orders a day with an AOV of $30 per store. That is incremental 20,000 orders a day and $600,000 revenue daily, and $219MM annually!
While Amazon is often seen as king, there is still room and opportunity for retailers to be disruptive. Leveraging the one medium Amazon has yet to master is key. As consumers are looking for quicker deliveries and more ways to shop, leveraging in store pickups or store-to-home delivery is a way to grow your sales, increase foot traffic, and give the customer what they want.
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