January 21

Retail shopping changes in the age of Amazon

New strategies aim to make shopping easier than breathing. But will consumers use them?

By Lydia Depillis
The Washington Post

At the National Retail Federation’s annual convention in New York, the hottest ticket was for a lunchtime talk about a company that wasn’t even there presenting. The enigmatic title: “Even Amazon Can’t Do This ... Yet.”

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A worker stacks a shipping trailer with boxed items for delivery at Amazon’s distribution center in Phoenix in November. Amazon has changed the face of retail shopping, New York convention speakers said.

Reuters photos

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A zoomed image of a computer monitor. Most innovations on display focused on how to take people out of the process.

“If you don’t think Amazon is a problem for your business, I don’t care where you are in the world, you are wrong. You are living under a rock. It’s time to come out,” consultant Lee Peterson of WD Partners declared to an overflow crowd packing an auditorium in the Javits Center. “The very concept of online shopping has become synonymous with Amazon.”

They listened as Peterson laid out the problem, raising camera phones in unison to capture the slides he presented about a customer base that sees little need to frequent physical stores since the advent of Amazon Prime.

And it wasn’t just that session: Just like much of the International Consumer Electronics Show revolves around Apple’s products even though the company stopped attending years ago, the chatter at last week’s retail extravaganza was a response to Amazon.com’s seismic influence. Since coming onto the scene about a decade ago, the Seattle company has rapidly turned from an online bookseller into a tentacular behemoth that sells anything and everything cheaper than the companies that produce it, laying waste to everyone else’s profit margins. And the retail world is still desperately seeking solutions. (Amazon chief executive Jeff Bezos owns The Washington Post.)

“The elephant in the room is Amazon apparently doesn’t need to make a profit, where other retailers do,” Hamish Brewer, chief executive of JDA Software, said in a keynote panel. “If you’re going to chase Amazon on price only, I don’t think that’s going to be a successful strategy. We have to, as retailers, develop strengths that Amazon doesn’t have.”

The retail service industry has gone into overdrive trying to give retailers new ways to fight back. At the convention, flocks of Brazilian and European executives milled about in two giant expo halls, peering at the latest grocery checkout stands and interactive digital signage. Tech companies hawked their analytics platforms with the help of pop-up shops by Momofuku Milk Bar and Godiva.

The good news, for them: The playing field is starting to level. A few years of overhauling technological infrastructure and rethinking distribution is turning traditional retailers into the kinds of entities that have a chance to survive in the new world Amazon has created. The bad news is that they’re not focusing on the one thing Peterson pointed out that Amazon does not do well – interaction with actual people in actual stores that have traditionally been better at selling merchandise than any newfangled technology could ever manage.

WHAT TO DO

If you really want to claw back some market power in the age of Amazon, you need to do a few things: Let your customers discover, purchase and have your products delivered anywhere they please. Make your physical stores into interactive fun zones. And, meanwhile, learn as much about the people buying from you as possible.

That overall approach can be encapsulated in one easy buzzword: “Omnichannelization” (a.k.a. “Amazon response”).

Let’s break that down. “Channels” are the ways in which retailers communicate with their customers, from their storefronts to their websites to their mobile applications. “Omni” means that you have to use all of them and that consumers need to be able to switch among them, ordering something online to pick up in a store, finding something in a store and getting it delivered to their home, whenever they want – the only way to compete against a company that makes buying everything as easy as one click.

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