3 Ways to Outcompete Amazon

Amazon.com has written and rewritten the rules of e-commerce since the late 1990s, and muscled more than a few traditional retailers into an early grave. Times have changed, however. Retailers large and small now have access to strategies and solutions that leverage their brick-and-mortar locations to fuel their e-commerce storefronts while increasing foot traffic at the same time. Better yet, the technology is available in the cloud, meaning lower capital expenditures and faster results.

Retailers can leverage their stores to reduce shipping costs, improve delivery time and cut inventory carrying costs, beating Amazon at its own game. They can also use their stores to create advantages Amazon can't match. Here are tips to help you gain the upper hand:

1. Ship from everywhere. Superior fulfillment wins loyalty and separates the winners from the losers. Ship to your customers faster and they'll be delighted with the experience you provide; ship to them more cheaply and your profits will flourish. Accomplish both goals by shipping from the location nearest your customer, whether that's a warehouse, distribution center or brick-and-mortar storefront, and you'll cross fewer miles with each shipment, realizing both reduced shipping costs and improved delivery times.

If your stores and warehouses are spread across the country, this store-as-fulfillment-center concept also gives you a significant edge over many less diversified online retailers who are forced to ship from just one location or two locations, typically at higher costs and with delays to the customer. Not only that, reducing reliance on warehouses for customer shipment leads to lower inventories.

2. Skip the markdowns. As an added benefit, this ship-from-everywhere capability can also translate directly into fewer markdowns. The constraints of limited shelf space too often force retailers to deeply discount merchandise simply to clear the way for new products. Fulfilling online orders from overstocked stores frees up shelf space and enables your business to realize higher margins on more units.

Getting there requires a consolidated view of inventory and a tightly integrated order management system (OMS). Fortunately, solutions are available today for rapid deployment in the cloud which can give your business command over stock levels at all locations, reduce IT overhead and offer superior ease of use.

3. Offer in-store pickup and returns for online shoppers. With an OMS that supports all your shopping channels, you can turn your stores into a tremendous asset by offering far more flexibility and choice than Amazon can provide. Want to purchase online and pick up in-store? Ship to home but exchange in-store? Your customers will always hear the same answer: "yes."

Give online shoppers the ability to browse stock levels at nearby stores. Whether they simply want to try before they buy or pick up in-person to avoid shipping costs and waits, this freedom reduces return rates because customers can make an in-person evaluation before committing to a purchase.

Access to real-time inventory can also turn a retail stockout into a purchase. Generations of shoppers could care less about rainchecks. They want to buy when they're ready to buy. If you're not ready for them to buy, the competition is just a click away. With instant command of the entire company's inventory and the ability to ship from anywhere, retail staff can guide in-store customers to an immediate purchase from their website, taking delivery from the warehouse or a stocked store instead.

The flexibility of in-store returns helps provide customers instant gratification, and gives your staff opportunities to win back disappointed customers by offering alternative products and cross-sells in-store. That's a level of high-touch engagement an online return label can't match.

When e-commerce inventory and transactions are tightly integrated with the store experience, shoppers win. They can purchase online and enjoy quicker fulfillment from a nearby location or pick up and exchange items at a local store. Retailers win by improving the effectiveness and potential of both online and physical sales channels, as well as the increased cross-sell opportunities of driving online customers into their stores.

Baruch Goldwasser is director of e-commerce for NetSuite, a provider of an integrated web-based business software suite. Baruch can be reached at bgoldwasser@netsuite.com.