How does a retailer know it’s doing all the right things, blazing new trails in ecommerce and is viewed as “the force to be reckoned with?” Well, the big indicator is that everyone else is trying to do exactly what you’re doing. As we’re told at least once in our lives — and in the infamous words of Oscar Wilde — “imitation is the sincerest form of flattery that mediocrity can pay to greatness.”
In the world of retail, that greatness is Amazon. The mediocrity is, well, every other retailer (Target, Walmart, Lowe’s, etc.), given the headlines of 2017 regarding what Amazon is doing to re-invent retail and the headlines of retailers striving to do the same.
As Retail Customer Experience reported this year, Amazon was very busy: In November, Bloomberg reported Amazon was gearing up to debut a roster of Amazon Go stores – its cashier-less retail strategy in pilot for over a year. In October, it expanded the Amazon Pay in-store program, and then in December, added Amazon Pay to the voice apps available from the Alexa Skills Store for its Echo devices.
Back in September, Amazon teamed up with Kohls to provide another product return option, as well as selling its Fire and Echo devices within the brand’s brick-and-mortar stores. As Retail Customer Experience contributor Chris Petersen noted in his blog, Amazon also purchased one of the largest defunct retail malls in America to build a colossal warehouse in the heartland.
But the biggest news of that month — and arguably of the year in retail — was Amazon’s $13.7 billion acquisition of Whole Foods. The news shook both the retail and grocery segments, but at least one industry watcher wasn’t convinced it would prove a win for consumers.
All of Amazon’s efforts this year paid off handsomely this holiday season. Amazon, in a release one day after Christmas, heralded its holiday season achievements, noting record-setting global sales and that its Prime membership grew more than 4 million in one week alone during the holiday season. (Prime is a $99 membership that offers free 2-day, 1-day or same-day shipping, and the Prime Now subscription offers 1-hour and 2-hour delivery options.)
Given all that amidst news of retail brands closing stores, there is debate that one can, with evidence, declare Amazon as the retail influencer of 2017 — possibly of even the past few years.
And the biggest reason may be the simplest and tied to just one Amazon strategy: delivery. Amazon has influenced retailers to advance their own shipping capabilities — consider the fact that Target bought Shipt, a same-day grocery delivery service platform, for $550 million at year’s end and hopes to provide same-day delivery of all major product categories by the end of 2019.
Greg Ng, vice president of digital engagement at PointSource, a Globant company, stated the acquisition “represents a realization of the pressures on retailers to increase the digitization of their supply chain so that they can meet the demands of consumers for quick, streamlined deliveries.”
Ng expects Target and other retailers to continue to roll out similar capabilities. “I expect some of these features to include more frictionless experiences like self mobile checkout and quickening the delivery time from store to home,” he shared in an email note to Retail Customer Experience.
In addition to Target’s shipping acquisition, other retailers have been scrambling all year long to catch up to Amazon’s moves. Just two months prior to Target’s Shipt acquisition, Walmart purchased Parcel to provide New York City residents delivery within 24 hours. In September, Walmart announced it was beta testing another delivery service in which Walmart delivery personnel would enter consumers’ homes and deliver groceries into refrigerators.
Such strategies are all being influenced by Amazon.
“Amazon’s impact on retail is relentlessly ‘moving the goal posts’ by enabling rising consumer expectations for personalized experience and service,” said Chris Petersen, a Retail Customer Experience blogger, in an email interview. Petersen isCEO of Integrated Marketing Solutions and a strategic consultant who specializes in retail, leadership, marketing and measurement.
So as 2017 comes to a close, Retail Customer Experience reached out to respected bloggers, industry leaders and retail segment watchers for their knowledgeable perspective on where Amazon is truly leading and innovating.
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What Amazon’s really great at
In talking with experts, it’s clear that Amazon deserves a great deal of praise and back slapping for innovating from supply chain and distribution to meeting consumer demand for fast, very fast, delivery.
But while Amazon is a big influence, it’s not necessarily the biggest, said Christopher Hall, managing director of the Interactive Customer Experience Association (ICXA).
“I think (Amazon founder/CEO Jeff) Bezos is taking advantage of an obvious opening in the market, just like Jack Ma and Joseph Tsai, and everyone is running scared,” Hall told Retail Customer Experience in an email interview, adding, “but how often has Amazon even shown a profit?” and noting better than 90 percent of retail sales are still taking place in brick-and-mortar environments.
“(With) the prevalence of CX and the customer-centric model retailers are being forced to adopt, I might be sorely tempted to pick the late Steve Jobs as the bigger influence on retail today. Look around you the next time you’re shopping: Where is everyone looking?”
Hall believes Amazon has “balanced” out the “Walmarts of the world” and is pushing retailers to better serve customers — which, as he noted, are all good things.
“What Amazon has done is helped give power back to consumers, believe it or not. The other things it’s done is scared the traditional storefront retailer into starting to pay better attention to its customers. Or at least the smart ones it has. Amazon takes pretty good care of its shoppers in my experience. It’s prices actually aren’t always — or even most always — the cheapest, but it’s got convenience and service down,” Hall said.
Petersen noted that while he views Amazon as a “huge influencer” in retail, it’s not for the reasons many would assume. He views Amazon as an ecosystem designed to optimize customer experience at every touch point; before, during and after the sale.
“Amazon is one the very best at ecommerce, but they are also a worldwide distributor with their own planes, leased ships and huge infrastructure. Amazon is also now a manufacturer of their own devices (Echo, Fire, Kindle), which in turn provide a portal to all of the other things Amazon has to offer,” he said.
“They are changing consumer behavior. They are impacting other large retailers. They are causing closures or at least shrinkage of many stores and shopping centers,” he told Retail Customer Experience in an email interview. “If you are a competitor to Amazon, you are in their cross-hairs, and they are aiming for total dominance,” he said, adding that retail is likely just the first frontier Amazon is focused on dominating. He expects Amazon to be a similar force in grocery, healthcare and other industries.
“They make it so easy to find what you want and get it delivered quickly. They take good care of their customers and they are honest and trustworthy,” said Kagan.
Chip Bell, a Retail Customer Experience blogger whose book, Kaleidoscope,won the 2017 Best Book Award in the business book category after winning a 2017 Silver Medal from the North American Book Awards, views Amazon as the biggest influence on retail due to one reason: it is willing to be experimental.
“They focus on what might be, not on what has been, and their customer insights not only are grounded in what they know for sure consumers want today, but also on what consumers wish for,” he told Retail Customer Experience in an email interview, referencing Amazon’s purchase of mega grocer Whole Foods.
“But, just like AirBNB that owns no hotels, they recognize the new frontier of retail is not “stuff to sell,” but rather data and technology that drives an easier, more tailor-made consumer experience,” said Bell, noting that Amazon has changed the concept of store hours to cause consumers to think 24/7 instead of 10 a.m. to 8 p.m. like most mall stores.
“They have taught consumers that it is better to get an easy buying experience with later delivery than a challenging buying experience (e.g., parking, finding merchandise, indifferent clerks, challenging returns) with instant delivery,” added Bell.
By locating more distribution centers closer to consumers, Amazon is even altering the definition of “later delivery” to “this afternoon” instead of overnight.
“Their experimentation signals to the marketplace a company destined to be a part of their future, unlike the big retail boxes that make the news with their massive store closings,” Bell said. “They are on the forefront of beacon and AI technology, again creating a portal for customerization.”
Published with permission from www.RetailCustomerExperience.com
Photo Credit: iStockPhoto
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