How Retailers Can Compete With Amazon This Holiday Season, and Beyond While many purchases are still made online, consumers still appreciate their local shops and the ability to discover items.
By Jeff Fagel Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
When it comes to holiday shopping, competition is the name of the game. For shoppers, it's all about pushing through massive crowds inside retail stores, digging through the online clutter and snagging the deepest discounts and deals. For retailers, on the other hand, it's all about dominating consumers' attention and selling more.
Amidst it all, there stands one very formidable opponent: Amazon. To understand why the ecommerce giant is such a threat to retailers, let's look at the figures.
In 2013, its sales topped $67.9 billion -- that's $49.6 billion more than Apple. But as with many fights, there's a challenger and a favorite. And in this retail battle, there's a tendency for marketers and industry pundits to proclaim Amazon as the clear winner.
Related: Marcus Lemonis's Top 10 Tips for Businesses This Holiday Season
Sure, Amazon can ship items anywhere, but can it fulfill the local and personal needs of shoppers? Can it solve their pain points immediately and answer questions such as "I need cold medicine now," while at the same time evoke inspiration? The answer is no.
So as holiday shopping ensues, retailers will have to do what Amazon simply cannot do -- be "channel-less" and activate local marketing across multiple touch points and stages of the buying journey.
"Reverse showrooming" will have a much bigger payoff.
A couple of years ago, the practice of showrooming -- where shoppings would look at an item in a store then purchase it online -- was on an alarming rise, with 50 percent of online purchases in 2012 occurring as a result of this behavior. However, in the last two years, the practice has decreased (falling down to just 30 percent of purchases in 2013) as businesses have found more effective ways to fight back.
While showrooming is centered on price, "reverse showrooming" is all about discovery. Therein lies the real opportunity. As our research found, 30 percent of holiday shoppers said they always use their desktop/laptop computers to research on-sale items before heading to stores. If that stat isn't convincing enough, another 25 percent said they go online to "compare products and prices between retail stores" before making their way to stores.
As digitally dependent as shoppers may become, the desire to see and touch products inside a physical retail store is not going away. While digital technology and tools may cut research time down and help pinpoint cost-saving deals, 90 percent of shopping still occurs within three to five miles of consumers' homes.
Mobile deals will bring shoppers into stores.
Mobile is a powerful tool -- it acts very much like a shopper's personal assistant. In essence, these personal assistants -- smartphones and tablets -- take on much of the research burden and make it far easier, quicker and efficient to build shopping lists, find promotional offers, redeem coupons and even make purchases.
When you look at the stats, it's hard to deny this. Forty-five percent of holiday shoppers plan to use their mobile devices for shopping-related research and 54 percent claim those mobile searches would positively influence their in-store purchase decisions throughout the season.
Related: 5 Tips to Make Your In-Store Mobile Marketing More Engaging
That's why I strongly caution marketers to step outside of their channel boxes and approach mobile marketing more as a behavior. It's not something that can be done overnight, either. First, retailers have to shift their mindsets and test varying approaches to connect with consumers across the shopping journey -- from online to in stores. Closing the loop from online and mobile exposure to in store is possible -- and being able to prove sales will be increasingly important.
In the fight for local relevance, behavior trumps channel every time.
We live in an "always on, always connected" world. It's a world where we use multiple devices, divide our attention between screens and multi-task dozens of tasks at once. We're also in greater control of our shopping experiences and have more choices than ever before.
In this "multi" world, it's the norm, not the exception, for inordinate amounts of emails, websites, mobile sites and apps, coupons, seasonal promotions and social messages to pour in across all channels. This, in turn, has reframed the purchase path from its once linear shape to more of a pretzel, whereby both the digital and physical retail worlds intertwine with one another.
My advice is to ditch the channel-heavy focus. Instead, focus on streamlining the online-to-offline experience at every touch point and at multiple stages of the buying journey. Retailers have to face facts: the lines between online and offline shopping have not only blurred, they've begun to disappear altogether. With this blurring of lines comes even greater urgency.
As brands try to figure out omni-channel communications, those retailers that shift to an integrated communications approach will be the ones who win.
Look beyond the holiday season.
Consumers want messages that are relevant to them for the products they want, at the prices they need and available at the stores in their neighborhood. Physical retail is that necessary point of differentiation for retailers and brands to win against pure play threats like Amazon. For these businesses, the challenge centers on activating local marketing across multiple touch points and stages of the buying journey.
The bottom line is consumers don't have a channel strategy, they have a shopping strategy.
