Opportunities in an Amazon Era
“Retail isn’t dead. Bad retail is dead.” These were the defining words spoken by CVS Pharmacy President, Kevin Hourican, last week at NRF’s Shop.org conference. And he’s right. As both consumers and market watchers, we are seeing unfold what separates the bad, the good, and the few greats in the retail industry. The complex brew of seamless omnichannel experience, desirable product, forward-thinking customer service, and rapid and hassle-free fulfillment, are all notes which can all be detected by today’s discerning consumer palate.
Controversial a statement as it might be,
I’d argue that Amazon has shown us what good retail is, but on several dimensions, they’ve still not achieved greatness.
Okay, it’s great for their shareholders, but as a retailer, they’ve left gaps where others can fill in and leverage to their customers’ delight. So what are those gaps? Let’s discuss retail’s opportunities in an Amazon era.
Know Thy Source
Some of the latest stats show that Amazon has more than five million marketplace sellers - impressive stats underscoring just how wide and deep their assortment is. But there are times when it can be confusing and worrisome as a customer - where exactly is my product coming from and is this a reputable source? And therein lies an opportunity for Amazon’s competition to really step up their game. They can do this first, by utilizing the reputational power of the brands they stock, and second, by reinforcing that as a retailer, you vet everything you carry to meet your (and your customers’) highest standards - and that what’s for sale isn’t there simply because you’re being paid to promote it.
Fundamental to success in building this type of credibility with your customers is ensuring that it looks like everything is coming from a single source. This starts at the product listing - complete product descriptions, searchable tags, brand linking, self-explanatory imagery, and customer reviews. Going one step further to the receipt of the product itself - the outer and inner box, the personal note and paperwork, and the product itself - no matter which of your distribution centers the item originates from, - need to look consistent with each and every order. I know, these things might seem nitpicking, but in consistent execution of the details grows brand trust and customer lifetime value.
Curate and Own It
You’ve probably heard it before, “You can’t be everything to everyone.” And while Amazon challenges this maxim with each private label it launches and acquisition it makes, there is truth to this in retail. Curation comes from a retailer or brand having a certain point-of-view and authority on a category or lifestyle, and in certain shopping scenarios, curation is the key to unlocking a great shopping experience.
Where Amazon excels is offering something in every category, but it doesn’t necessarily give us a point-of-view beyond, “We’ve got a lot of stuff.”
How do we experience curation as consumers, and why do we need it? It comes through in the products themselves, what’s adjacent to these products, and the environment in which they’re sold. It matters because sometimes you’re shopping a new category, one in which you have little knowledge, and you need more information to help guide your purchase. Moreover, curation, specifically when utilized to limit the number of products in a given search set, also helps shoppers distinguish between what’s a passable choice and what’s really going to check all those boxes.
How can retailers do curation one better than Amazon? In some ways, it’s pretty simple - you don’t need to offer a million options. You just need to know which aspects of the item you’re selling are most important to customers and map your options to these considerations. (Own it!) Another tip? Keep in mind what’s merchandised next to that item - whether that’s digitally or in a physical store environment. Does what’s next to the item add or detract value from it? Does it make a customer more or less likely to purchase? Believe it or not, customers glean a lot of information from adjacencies and the environment in which it’s merchandised.
This Is Personal
Artificial intelligence is pretty Amazon-- I mean, amazing - in its capabilities, but when it comes to feeling like that algorithm truly gets me, well, sometimes I think we’re all left feeling a little misunderstood.
I do a lot of random research on Amazon for stuff, whether I’m looking for something for work or buying a gift for someone, and there’s a lot of times I get a “you might like this” email, and it’s completely off-base and -occasion. (If I just bought a case of hairspray, why would I need another one from a different brand?) But big hair aside, I don’t really expect a company as big as Amazon to really get me on that personal of a level. What’s more, I don’t even think I’ve ever really interacted with someone at Amazon in all the years I’ve been a customer. And yes, you guessed it, here’s where retail can do better. Whether it’s in your email marketing efforts or customer support channels, think about what makes shopping one category different from another. For example, if I’m shopping for furniture, do you know whether I’m outfitting a new home, or am I just buying one piece because I like it? These are the kinds of data points you need to collect that will ultimately help differentiate you as a retailer and personalize one’s shopping experience. And what about understanding what necessitates high- versus low-touch customer service? What, if not answered today, will make the customer abandon cart, and what can be answered by email within a short timeframe, and they’ll still be a happy camper? Automate away, but do it in a thoughtful way that is less broad strokes and more considered as to specific category and shopper need states.
Bad retail’s days are numbered, good retail keeps us in the game, and great retail, well, we’ve all got some work to do.