ASG Insight

Leveraging Amazon’s Weaknesses Could Be the Key to Retail Success

Amazon appears to sit at the top of the hill as far as retailers are concerned, but that hilltop may be on shaky ground. It was assumed that pureplay retail was the path to success, but analysts at PSFK Labs have uncovered data that boasts opportunities for traditional brick-and-mortar stores. Unfortunately for Amazon, desktop shopping is on the decline. Offline shopping is transitioning to mobile devices, opening doors not available to pureplay retailers and offering brick-and-mortar stores some much needed leverage.

The initial numbers are concerning for the entire industry, but with a closer analysis, we can define where retailers can be successful. Although brick-and-mortar retail is expected to decline by 10%, desktop internet revenues are expected to drop by 7%. However, between now and 2020, mobile retail revenue is expected to increase by 10%. According to PSFK, offline shopping will still be popular, but it is the place of transaction that is changing the entire industry.

Amazon is a place for buying, not browsing.

There is no denying the convenience that pureplay retailers provide, but the decline of desktop internet shopping speaks volumes, as transactions are occurring more on mobile devices. When shopping on Amazon, most consumers already have a purchase in mind, and their loyalty to Amazon is mostly tied to fast shipping. Very few luxury purchases are made through Amazon, creating opportunities for luxury retailers to establish and grow their brands. What Amazon lacks, and what in-store brands can provide, is a blended retail experience that centers around an individual consumer’s wants and needs.

Pureplay retailers cannot offer a complete shopping experience.

PSFK research found that brick-and-mortar retailers can easily differentiate themselves, and even compete with, pureplay retailers like Amazon. When shopping on Amazon, there are no representatives enticing you to explore products, no instant gratification through free samples, and nothing to offer other than a purchase. Brick-and-mortar stores can leverage omnichannel strategies, with PSFK’s suggestions of AI-powered and mobile-enabled systems to assist consumers in every step. Technology-driven services have the potential to not only connect shoppers online and offline, but to build brand loyalty as well, if a retailer can adapt to the consumer’s shift in mobile browsing and purchasing.

Brick-and-mortar retailers can match pureplay convenience.

Many retailers are beginning to offer an in-store inventory, combined with iPads throughout the store for browsing online inventory. If retailers can match conveniences such as fast shipping, in combination with a memorable in-store experience, pureplay retailers will lose their allure. Many brick-and-mortar stores are offering incentives such as in-store pick up at lower costs for online purchases, giving shoppers the opportunity to browse in a way that is most convenient for them personally. This customized touch drives the entire experience and is critical to building brand loyalty.

What will ultimately drive sales is a retailer’s ability to effectively implement data management strategies to support the in-store experience. Using data, creating cohesive brand strategies across platforms, and focusing on customer experience is required for survival today’s market. Brick-and-mortar retailers have more potential than they realize, but a transformation to omnichannel is necessary for positive results.