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Three years after Amazon went online, and one year after it became a publicly traded company, Deep Impact (1998) premiered in theaters. The film depicted an E.L.E., or extinction-level event, befalling mankind. A huge meteor fell to earth and wreaked havoc. Many lives were destroyed.
Consider the parallels here.
Amazon’s explosion onto the scene has had a seismic impact on the retail industry. And the carnage continues, according to experts. The company is widely blamed for wiping out the dinosaurs (with chapter 11 filings continuing to mount) and for diminishing most of the brands that have managed to survive.
In this new online era, brick-and-mortar retailers face a much harsher climate. The question is, will they continue to eke out a meager existence? Or will they carve new paths to greatness?
If You Settle for Declining Revenues, You Risk Extinction
“That narrative is all wrong . . . 90.2% of sales are still in stores. Amazon still only controls 1.5% of U.S. retail sales. In the all-channel purchase process, 82% of online retail interactions involve stores at some point; 70% of digital interactions create a store visit by the customer.” —Jerry Storch, CEO, Hudson’s Bay Company
Many industry analysts and retail executives have resigned themselves to today’s “new normal.” Sales are down from last year, but that’s life in an Amazon-ruled world. It’s becoming exceedingly difficult for brick-and-mortar retailers to survive (let alone compete to win).
But far from impossible.
Apple, IKEA, Walmart, Best Buy, Dick’s Sporting Goods—these and other retailers are crushing it. Their in-store sales revenues keep climbing, despite the supposed disadvantage of competing in the physical realm.
In fact, a number of formerly online-only merchants (including Amazon) are now venturing into brick-and-mortar territory. They understand the huge benefit of cross-channel synergy and of making personal connections on the sales floor.
For retailers that struggle to increase traffic and sales, the message is clear: This is no time to lower expectations. It’s time to raise your game!
Brick and Mortar Must Become a New Species
For many consumers, barriers to online shopping still exist: they want to see, feel, and compare before they buy. They have questions they need answered—preferably, by product experts who will listen to them and make recommendations based upon the unique situation at hand. These consumers need more input so they can purchase with confidence.
Stores that are competing successfully in today’s online era give customers the best of online retail (ease and convenience), plus everything online retailers can’t. They’re blurring the line between physical and digital. They’re creating an environment—innovative in design and teeming with great people—that shoppers look forward to experiencing.
Seamless Path to Purchase
Shoppers want ease and convenience across channels, no matter how zigzag their path to purchase. Flexible purchase, shipping, and return options—buy online, pick up in store (BOPIS) and buy online, return in store (BORIS)—are the new brick-and-mortar standard.
Retailers that have embraced the store-within-a-store concept are creating lifestyle destinations. Cross-category inspiration is fueling innovation. And dedicated brand experts on the sales floor are sharing their knowledge and enthusiasm to build sales.
Experiences Over Products
The continuing decline in retail revenues also reflects consumers’ growing preference for experiences over products. Experience retailers have transformed the shopping experience by creating premium destinations for fun, learning, and better living.
What brick-and-mortar customers crave (and can’t get online) is authentic human interaction. Knowledgeable, helpful associates who are properly trained and equipped can help customers find exactly what they need, give them helpful suggestions, and delight them in unexpected ways.
There’s No Excuse for Failure (to Adapt)
Thriving in today’s online era requires an enterprise-level commitment to achieving steady progress. The first step is understanding, soliciting feedback from, listening to, and responding to your customers through ongoing customer experience management programs. Along the way, you must look inside and outside your category for inspiration. And never stop searching for ways to break the mold and shake up the industry.
How have you adapted in the age of Amazon? Where do you draw your inspiration? What are your biggest challenges going forward?
Please share your thoughts in the comments below!
This article was originally posted to our blog where you can find more posts like this at ICC/Decision Services Blog.