Big box and department store retailers are fighting back against Amazon, and this fight isn’t about winning – it’s about defending their reason for existence in an industry dominated by Amazon.
In an effort to re-stake their claims on marketshare, big box retailers are thinking outside of the traditional brick-and-mortar confines to keep up with fast moving customers. Retailers such as Macy’s, Nordstrom and Target are repositioning as they figure out what they can do to keep customers from straying in the age of Amazon.
While they may not be able to beat Amazon, the goal is to prove that they can still remain in business and turn a profit. The following are some tactics being deployed by retailers.
Ever Changing Store Strategy
With investments in private-label and inventory exclusives, turning physical stores into fulfillment centers, positioning in-store employees as category experts and driving participating in loyalty programs, stores are also continuing to invest in e-Commerce and mobile commerce capabilities.
Stores and Employees
Retailers are determined to turn their store networks into their top Amazon defense mechanism. Target, for example, has eighteen-hundred physical store locations, which is something that Amazon cannot compete with.
While online shopping poses a threat to the almighty “Target run,” where the customers goes in-store to pick up one item and comes out with a new outfit, pillows for their living room couch, and other fun things they did not plan to buy, Target has launched capabilities like buy online, and pick-up in store or curbside delivery. Instead of defending their traditional model, they have chosen to embrace change.
Target is not solely relying on in-store pickup for customer order fulfillment. They recently acquired Shipt, a delivery service to localize deliveries using stores as fulfillment centers. Their goal is to offer same-day delivery service across the U.S., which is the last mile that Amazon has yet to crack.
Retailers are out to prove that customers aren’t only devoted to Amazon and its Prime program exclusively. Ulta Beauty, for example, reports nearly 28 million members in its Ultimate Rewards program. According to Ulta, their rewards program drives 90 percent of the retailer’s sales, with customers driving the company’s brand partnership, marketing and data strategies.
While buy online and pick-up in store capabilities seem rather low tech compared to Amazon Go’s checkout-free stores of the future, tech efforts are certainly bolstering efforts in anti-Amazon strategies.
Target’s shopping app, Cartwheel, stores coupons and promotions personalized for shoppers, and was built as a direct response to Amazon. Target realized that customers were comparing in-store Target’s product prices to prices on Amazon, so Target built Cartwheel as a way to minimize price discrepancies and reward returning customers.
Macy’s will be doubling its online assortment and will launch a vendor-direct platform. In response to the company’s growing web inventory, Macy’s is investing in personalization to curate the assortment for individual customers. Macy’s is also investing in updating the customer’s in-store experience with store remodeling, mobile checkout kiosks, additional in-store technology, more staff and extras like cafes.