How Retailers Can Win in an Amazon World
I recently went to an event where one of the speakers was talking about the challenges he’s facing as a retailer in an online world. On one hand retailers have to compete in the same ways they did before, but they also have an online frontier to think about as well as the behemoth that is Amazon. Where do businesses invest? In their online experience or the in-person retail experience?
I’ve got some ideas as to what I might do and thought I’d write about it. I’d love to know what you think.
Just so Crazy it Might Work
To give some weight to the potential answers I propose, I’ll start with what is happening with one of our clients, and then I will finish with answering the question.
We have a client who sells kitchen supplies to retailers and restaurant chains. They’ve got 3 large locations, carry 5000 skus and have built a business on amazing service.
The business had to close their doors to the public for the first in a long time. Luckily, last summer we worked on building out a website for their 5000+ Skus (along with portals to support their large recurring commercial clients). We were finding a lot of success doing Google shopping ads, SEO, etc…
Then Covid-19 happened and the client initially thought they should ramp down their expenditures, but instead we ramped things up. We put their most in demand cleaning supplies on the front page, and enabled safe in-store or curb-side pickup (easy to do on most e-commerce platforms) as a shipping option.
Now, we’re seeing that the people who used to come by the store are now using the shops website to make the same purchases, if not more. After all, it’s a lot faster to browse collections and use the search function than it is to walk up and down the isles.
The idea of buying online and picking up in-store is nothing new, but it is interesting to see in-person shoppers converted to an online shoppers. That brings me to my answer…
Incentivize In-Person Customers to Become Online Customers
Consumers are spending more money online because their shopping habits have shifted. It’s going to continue this way, and retailers need to get their customers in the habit of buying from them online. Sure, the battlefront for customer acquisition is going to be online where they are competing with the likes of Amazon, but it’s not the only place to make an online customer.
My idea, or answer to How Retailers Can Win in an Amazon World has to do with directing retail locations to convert their in-person customers to online purchasers by taking action in-store when they’re physically with a customer.
E-commerce Stations in Store
Stores have check-out counters for regular in-store purchases. I would submit that they should also have a counter with computers setup so sales staff can help customers shop virtually. This allows them to:
A. Create online accounts for their in-person customer;
B. Add products to cart; and
C. Checkout online.
In doing so, customers will get a handheld online shopping experience.
The pick-up can still happen immediately in-store or the customer can choose to have the items shipped so they don’t have to walk around with their purchase.
There is no easier way to make an online customer than to use your retail locations as showrooms and get sales staff to orient customers to the online shopping experience. Any questions about what to do and where to go can be answered on the spot!
Making this kind of shift is going to require buy-in from the organization at large, especially the people on the front lines that handle customer sales, exchanges and returns. Furthermore, your commissioned sales staff will be resistant to converting in-person shoppers to online shoppers because it is counter intuitive to their own interests.
Without good reason it might be hard to convince any sales rep to direct business to an online portal. In addition, store managers that are judged on store sales would also be reticent to dissuade those that would be repeat customers to buy online instead of coming back and purchasing in-store.
That’s where incentives come into play.
First, it would be important to set things up so that online sales and purchasers could be traced back to the store and sales person that signed them up. Done correctly, an organization could work out how to remunerate the stores and sales people. While every situation differs, most sales people and sales manager would buy in to signing their customers up to online if they knew how they’d benefit from the initial purchase and subsequent purchases on the website.
For some, credit will be enough, but for others the best convincing happens when money talks.
The customer incentive already exists insofar as they can place an order for pick-up and that eliminates time in-store. The customer can also have their items delivered, which saves even more time. That said, some customers may want to get in and out and not care to be walked through and online buying experience. In fact, many of them may be resistant so it’ll be up to those dealing with the customer to make the best decision when to push the online experience. Here again, incentives might convince a customer to take a little more time with them when it means:
- A larger discount
- A free item
- Free Shipping
- Free Gift Wrapping (ex.”Use Promo Code: “Wrap It” and we’ll ship your item wrapped and ready to be placed under the tree”)
- The promise of hassle free returns and exchanges
Indeed, this is what it would take for me to take the extra time because I’m still one of those dinosaurs that likes going to the store. I personally enjoy talking to a sales person, browsing the store and touching and trying what I’m thinking of buying. That being said, with an account, and incentives already in hand, I might just buy online in the future when I don’t have much time and rather not think about finding a parking spot.
I’ll end with this…
Remember, once you have an online customer, you can sell them when they’re not in your stores. That’s very powerful. It’s worth the investment now for the future gains.
The trends are already showing that physical retail stores are closing (Forever 21). For the ones that remain open they need to not only be a place to sell, refund, exchange, warehouse and showcase, they need to be a conversion point.
What do you think?