Comment: How traditional retailers can shine in Amazon Prime’s shadow

Amazon may dominate the online marketplace, but there is one tactic that traditional retailers can rely on to compete with the online giant, and that involves utilising customer-focused technology while continuing to provide the traditional “hands-on” approach to shopping. Although Amazon’s might lays in its ability to innovate from within, using its own systems and technology which it has either developed in-house or acquired to complement its services and strategy, the latest research by IBM and NRF indicates that 98% Gen Z shoppers surveyed prefer to shop in the traditional way “in-store”.

Provide excellent customer service

Sure, Amazon may be making its foray into the physical retail space with Amazon Go, but how adaptable is this showcase of extensive innovation and impressive new technology to a wider range of products outside of food and groceries? Fortunately for those building careers in customer facing retail roles, there are laws in place around the sale of tobacco, alcohol, fuel and solvents that require store personnel to be available. Consumers still value human interaction when shopping in bricks and mortar stores and while mobile and social media influences their shopping, they still value good service too. Retailers must engage with their customers through all channels and if they can achieve this and ensure that the product is available at a time and place when it is convenient to the customer then they can really stand out from Amazon. 

Improve stock visibility

Stock inventory systems must be seamlessly integrated to provide an accurate up-to-date picture of stock availability and Amazon Prime works very well when the customer has done their research and knows that the product they are purchasing is exactly what they want. The customer can have the product delivered at a time and a location that suits, but savvy retailers can convert the sale at the point of the customer carrying out its research.  For example, customers that showroom – viewing the product in-store before purchasing online – could be encouraged to complete the purchase in-store, offering price matching or same day delivery and collection within the hour. 

Get the price right

Even with its initial 30-day free trial, Amazon Prime isn’t ultimately free; following the trial period here is a premium for the entire service which contains elements the customer may not necessarily need or want. In fact, some Amazon Prime customers claim that the price, even with free shipping, can be more than other retailers are selling the product for, so it is definitely worth shopping around.  Conversely, if a retailer has a customer wishing to purchase a product in-store it can fulfill the order or complete the transaction there and then.

Optimise stock availability

Retailers must be more efficient when it comes to defining pricing strategies to compete with Amazon. One significant area in which retailers can reduce their costs is to optimise their stock availability. An issue for many retailers is the amount of stock that is consumed in the returns loop; for example, online fashion retailers can generate significant volumes of stock returns with 33% of items bought online being returned in some cases. While many would assume that these returns are a result of customers ordering items to try out different sizes, research shows it’s a consequence of customers trying out different styles.

Know your customer better 

Sending unwanted items back is quite a hassle for customers and a cost the retailer can do without. Assisting the customer to make the right choice first time can significantly reduce the costs to the retailer and these savings can make the retailer more competitive. Machine learning computers that develop a digital footprint of the customer may help reduce the number of returned goods by understanding what styles and sizes the customer has bought in the past. The same technology can use social media and other data inputs to predict shopping trends and demands. 

Maximise the human element

Amazon engages with its customers solely via a digital platform. Traditional retailers can capitalise on this by providing a friendly, informative and helpful human experience which can inspire in-store purchases and return visits. While online shopping provides consumers with a convenient way to shop from anywhere, consumers still like to ‘showroom’ products, visiting bricks-and-mortar stores to inspect products in person before deciding on whether to purchase. Retailers can secure these purchases on the spot with helpful human interaction as well as utilising omnichannel technology to bring the convenience of eCommerce into the store.

Recognise your advantages

On the surface, Amazon Prime does appear an attractive offering, however some customers have claimed the products advertised can be found cheaper elsewhere and users continue to pay a premium even when they’re not using the service, which brings into question the value of Prime membership. One Amazon Prime user took to Twitter to complain that on Amazon Prime Day, high-demand items sold out quickly, yet items which were still available were deemed to be the more uninspiring product ranges.

Consumers still value the old-fashioned shopping trip, but if store visits are to be converted into purchases rather than just opportunities to inspect products before ordering online, retailers must utilise innovative omnichannel technology to bring the convenience of e-commerce to the physical shopping experience. If retailers can successfully roll out the technology that supports this, they will find a strong footing to help propel themselves out of Amazon’s shadow and into the favour of the modern consumer.

James Pepper is technical services director, at Vista Retail Support.