Don’t let the “Amazon effect” roll over your retail stores. Learn from them and play to win!

You hear it all over the media that mall traffic is down, that same store retail sales are in decline and that many retail stores are being shuttered as a result. While retail sales soften, e-commerce growth continues at a double digit pace annually. The Amazon effect is being touted as the reason so many retailers are struggling today, and although there is much truth to it, the death of brick-and-mortar stores is simply NOT going to happen.

Nothing so clearly emphasizes that point than Amazon making a big push into retail, announcing a planned roll-out of over 400 stores after their successful debut in Seattle in 2015. So with all the advantages as an e-commerce powerhouse, with all the benefits of the scale, and cost efficiency that they have enjoyed, why would they want to open stores? Why take on the cost of real estate, staffing and all the other operational expenses that bricks and mortar entails?

Amazon is opening stores because they understand that person-to-person customer engagement is critical, something that you as a retailer have always known. Shopping is a social experience and Amazon wants to engage with their tribe face to face, but it goes deeper than that, much deeper. Amazon knows so much about their customers from their mastery of online analytics on customer purchase history, recommendations that they want to deepen that customer knowledge and engagement in the brick-and-mortar world.

Amazon wants you in their stores, with your Amazon App on your phone, scanning barcodes, reading reviews, checking prices all in an effort to get an even deeper understanding of your wants, desires and needs. They can see at what price level you take action and purchase, and when you do not. You may be in their store to purchase an item that they don’t have in stock, but no worries, that lawn mower can be shipped to you in 2 days with free shipping because you are an Amazon Prime customer. By engaging you at the store, yet having the backend online engine and analytics heft, Amazon can truly be the “everything store” to their customers.

So we know from this Amazon move to brick-and-mortar, the importance of the in-store experience, but what can specialty retailers learn from this jump from “clicks to bricks”? What actions can be taken to align with the forces taking shape in retail due to Amazon?

With Amazon entering brick-and-mortar to deepen engagement with their clients, you in turn, need to make the investments to better engage your clients across all channels as well.

Here are a few ideas on how to infuse Amazon’s heft into your retail operations:

#1: You must deliver a seamless online and in-store experience to your customers. Like Amazon, you need to be capturing all relevant data on your customers across channels so you can best service them with a consistent brand experience, the so called “unified commerce” experience.

#2: You must have the retail technology in place to deliver a true omni-channel experience where your clients can buy online and pick up at the store, buy online and return to the store, buy online and have the item shipped from the store, the ability to redeem gift cards and loyalty points between store and web. These capabilities are outside the scope of many older legacy retail systems.

#3: You need to make the retail experience in your store just that, an “experience”: One that cannot be easily replicated by Amazon or anyone else.

#4: You must leverage your stores as fulfillment centers to counter that fast and free delivery option available to customers via Amazon. Offer free in-store pickup, offer free delivery over a certain order size, or for VIP customers.

#5: Re-energize your loyalty program and take a cue from Amazon Prime and how they have used this program to deepen the loyalty of Amazon shoppers through irresistible perks. Of course you cannot mirror this program, but what can you do to deeply engage your clients to keep coming back.

The “Amazon effect” will force retailers to get better, to work smarter, to become more efficient and to engage customers at a deeper level. It is time for retailers to play to WIN, and use this competitive threat as the catalyst to make them take the necessary actions to not just survive, but thrive with their customers.

If you would like to learn more about the technologies that specialty retailers are using to deliver this “unified commerce” and omni-channel experience, you can reach Michael Dattoma at Michael@retailmerchantservices.com

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