Editor's Note: The Amazon Effect: How Retailers Are Adapting to Compete
Amazon.com is clearly disrupting the retail industry, both online and offline, and its influence only continues to grow. The question is, how do retailers not only compete with Amazon, but also beat it?
To find out, Total Retail, in conjunction with IBM, a leading digital commerce platform provider, surveyed its audience with the goal of finding out how the retail industry views Amazon’s position in the marketplace, how it's impacting their businesses, what technologies and innovations they've implemented as a result of Amazon doing so first, and how their spending on technology has changed as a result of Amazon's continued dominance of the e-commerce market.
The findings are now available in Total Retail's newly released report, The Amazon Effect: How Retailers Are Adapting Their Businesses to Better Compete With the Industry Leader.
Why focus on Amazon? As we all know, 2017 hasn’t been kind to traditional brick-and-mortar retailers. From bankruptcy filings to store closures to companies going out of business, the first half of the year has analysts talking about the “death of retail.” The common thread between all of these is that consumer buyer behavior has changed. Today’s consumers are increasingly digital- first. Fewer consumers are choosing to shop in-store, opting instead for their phones, tablets, laptops and desktops.
At the center of this digital shopping transformation is Amazon. The formerly online-only retailer continues to exert its influence on the retail industry. From its online marketplace to newly opened brick-and-mortar stores to web and fulfillment services, Amazon is a force to be reckoned with. Consider the following
- Amazon accounted for more than half (53 percent) of all U.S. e-commerce growth in 2016.
- Fifty-five percent of consumers start their product searches on Amazon, more than any other channel, including Google.
- Amazon’s market value at the end of 2016 ($355.9 billion) was larger than the next eight brick-and-mortar retailers — Wal-Mart, Target, Best Buy, Macy’s, Kohl’s, Nordstrom, J.C. Penney, Sears — combined ($297.8 billion).
- Amazon moves nearly six times as much e-commerce merchandise as the eight biggest brick-and-mortar retailers — Wal-Mart, Target, Best Buy, Nordstrom, Home Depot, Macy’s, Kohl’s, Costco — combined.
How Retailers View Amazon’s Strengths
For the survey, Total Retail and IBM focused their questions on particular areas of strength for Amazon, including customer experience, personalization and order delivery.
The data we got back both confirmed some hypotheses we held going in (e.g., retailers believe Amazon has completely changed consumers’ expectations for order delivery, from speed to cost) as well as offered some surprises (e.g., the majority of retailers haven’t increased their spending on personalization/customer experience technology in the last two years).
This report serves as a research tool to give you insights into how the retail industry views Amazon’s position in the marketplace, as well as identify growth opportunities for your business. Take a cue from Amazon and become an industry disrupter in your own right.
Download the report for free today!