Competing With Amazon is Like Outrunning an Aircraft: Time for Plan B
Retailers of all shapes and sizes are struggling to survive in the era of Amazon.com. Yet no businesses are struggling harder than midmarket brands and e-commerce retailers. Executives at midmarket businesses are faced with many challenges, from meeting escalating customer expectations on inventory, shipping and cost; providing a creditable end-to-end customer experience; and, most importantly, building customer relationships that result in return buyers.
All of these problems, however, aren’t unique to midmarket brands and retailers. Larger online retailers are suffering from many of the same complex problems. The crucial difference is the midmarket brand lacks the resources the bigger players have to overcome these challenges.
Fortunately, there are strategies that retailers can implement to survive — and profit — in this new retail reality.
Get Your Head in the (Growth) Game
Midmarket brands need tactical and strategic support that offers long-term security, expertise and growth. And while the Holy Grail of retail is achieving profitable growth, it comes with its own set of problems. From this standpoint, there are two primary pain points that retailers must learn to balance — scalability and profitability. Retailers are faced with building an infrastructure that’s capable of competing with Amazon and adaptable enough to handle the surges of peak while delivering a great customer experience year-round. And while it’s tempting to do that by just spending money and tanking margins, that isn’t a long-term play.
The Silver Lining: A Profitable Approach Exists
The good news? There are clear solutions to meeting scalability and profitability goals. While there's no one-size-fits-all approach that can be applied, there are innovative strategies that can be implemented to gain a competitive advantage and differentiate in a way that results in return customers. A few of these include the following:
- Put the end-to-end customer experience first: A holistic plan of attack addresses friction at every point in the purchase process, from order management, payment, tax collection, fraud detection, in-store and beyond. However, all of these components must be synched to work across the experience.
- The need for customization is increasing: Consumers are in control and want it their way, so retailers must be equipped with a viable way of fulfilling orders that is tailored to each individual’s desires and needs. This can include engraving, gift wrapping and curated beauty packages.
- Flexibility with delivery and return options: 60 percent of online shoppers prefer to return items to a store. This means brands must offer a wide range of delivery options to minimize the hassle of returns, including next-day delivery, changing delivery post-order, in-store returns and customized delivery dates.
Innovative Strategies Exist
At the end of the day, retailers shouldn’t try to beat Amazon at its own game because they're going to lose. There are, however, ways to profitably thrive in this new era:
- Embrace showrooming: While it may seem counterintuitive, people love to browse. First get customers in the door, then keep them in with an immersive showcase experience that takes them all the way through the checkout line.
- Offer same-day buy online, pick up in-store: This is one of the few ways to beat Amazon Prime’s two-day guarantee.
- Match pricing: It’s now necessary for retailers to match prices, plus it’s likely to incentivize repeat visits.
- Partner with other companies: With the right partners, retailers can deliver a better synchronized customer experience at scale, while generating increases to the bottom line.
For any retailer, it's overwhelming to try and address the challenges and pressures that exist as a result of the high bar Amazon has set for customer experience. It is, however, possible to take advantage of the situation and adopt the right strategies to take a competitive and profitable approach.
Stefan Weitz is the executive vice president of technology services at Radial, a provider of omnichannel commerce technologies and operations.