A lot of people think that most on-line retailers are growing faster than their bricks-and-mortar competitors. Apparently that’s only true for Amazon.
The Internet Retail Top 500 Guide 2013 compares retailers over the past 10 years. It states that the top web-only retailers annual growth rate over the decade is 15.6% – without Amazon. This compares to an average annual growth rate over the same period of 17% for the top retail chains.
I see this as a great achievement for physical stores. Top stores have fought back by changing the face of retail with the introduction of new processes and technology that focuses on the needs of their customers. We need to be talking more about this successful fight back against on-line retailers.
However, physical stores still have one big challenge and it’s called Amazon. While the top physical stores have grown by 15.6% a year Amazon has an average annual sales growth rate of 65%. They are also voted in a number of surveys as the top retailer in US and UK.
So what can retailers do to respond to the Amazon threat?
The first thing to do is to understand why customers buy from Amazon and deploy similar techniques in physical stores. To find out more read our white paper call the Amazon Threat.
The second step is to implement technology and processes to improve the things that customers really care about in stores. I recommend focusing on things that Amazon can’t do or that physical stores can simply do much better. Some of these things are at the shelf edge and don’t require massive investments. For example an updated ticketing system that can give customers more flexible reasons to buy on a per store basis as well as delivering clearer offers and improving compliance.
The third step is to implement future proof technologies and processes that can be easily changed or modified quickly as needs and technology changes. This will enable retailers with physical stores to not just respond to Amazon but also to win back customers from them.