The Fightback: 4 Ways Retailers are Taking on Amazon
Amazon might still be the dominant online retailer, and online retailer of the year, according to Business Insider, but there are signs that it is looking over its shoulder just as the wider retail market fights back.
OK we can’t ignore the continued carnage on the high street – with uncertainty swirling around once untouchable brands like Mothercare and House of Fraser. But, behind those doom and gloom headlines, something interesting is going on.
Change is in the air – positive change – as retailers seek new momentum and fight back. The focus is customer first and, given in-store still dominates sales, on deploying techniques once reserved for the online channel to drive sales growth across every channel.
Here are 4 ways retailers are using customer experience innovation to take on the might of Amazon:
1. Constant experimentation
I’ve written a lot about customer experience innovation recently and the role experimentation plays in delivering it. We all know that this is something that Amazon does very well, but retailers are starting to show that it doesn’t have a monopoly.
We’re starting to see a real shift in thinking. Retailers are more and more keen to understand the needs of their customers across a range of contexts and respond to them, ushering in an era of constant experimentation, testing and measurement.
Once, for example, a brand might have deployed iPads in-store for customer use and thought little more about it. Now, that same brand is likely to be conducting research to understand how useful the features provided by those iPads actually are to customers, then experimenting with signage, format, positioning, features and design to optimise the experience, measuring the impact as they go.
2. Understanding how digital drives in-store behaviour
Retailers acknowledge that the vast bulk of their business is still done in-store but also that mobile has had a massive impact everywhere else – so how can useful features be developed for mobile to support the offline shopping experience?
Research we completed a year or so ago showed that when customers use their phones in-store, they mostly use regular smartphone apps and functions, such as taking pictures of products and sharing them. Very rarely do they use features actually provided by or supported by retailers to complete their store shopping mission.
Historically the mobile experience presented to users when in-store hasn’t been adapted to reflect the in-store context, meaning that features that are of limited use, such as store locator and buy online are given undue prominence and features that might be useful are lacking.
As a result we’re starting to see significant innovation in this area. It won’t be long before customers will be scanning barcodes, not only to view content on the website, or to compare prices, but also to access features that are useful in that context, such as view store stock status, tap to try on in your size now, or buy to take away immediately.
3. Deploying useful technology in-store
The focus on useful innovation is not limited to things customers experience directly. Retailers are increasingly focused on helping colleagues deliver remarkable experiences to customers in-store.
The shift in thinking here is subtle but important. The days of deploying in-store systems, training colleagues to use them, then measuring usage and deploying compliance techniques are on the way out.
Now the focus is on creating tools that colleagues find genuinely useful – that are simple to use and meet specific needs well. Like consumer applications, they are increasingly designed with users in mind, tested and constantly improved through measurement and experimentation.
Retailers are accepting that creating something both useful and usable and enhancing the experience of colleagues is very powerful. It’s an investment that delivers tangible and often unexpected intangible benefits, compared to the traditional approach.
4. Creating a useful bridge between online and offline
Finally, retailers are asking ‘what’s the role of digital in motivating customers to come into store and what impact does it have on behaviour once they get there?’. In reality, for most retailers, Online to Offline (or O2O) is the biggest channel today.
As things stand, very few retailers provide useful features on their websites for people who intend to browse and buy in-store, with the whole experience focusing on “buy online” or “reserve/click and collect”. Want to visit a store and buy? – here’s where it is and when it’s open. That’s it.
The whole experience is ripe for innovation. How can retailers motivate users to come to store today? What offers can they expect? Are the products they’ve viewed online in stock? How will they they locate them easily when they get there? Will the store staff know they’re coming and be able to help? So much opportunity.
As a result, retailers are beginning to innovate in these areas – stores and the opportunities for great experiences they provide are a huge differentiator versus pureplay competitors, so it’s no surprise that retailers are recognising Online to Offline innovation as the one of the biggest areas of untapped opportunity.
So can retailers win the battle?
It’s probably an exaggeration to say that we are at the dawn of a new era of customer experience innovation, but there is definitely a change of momentum in the scale and pace at which retailers want to identify opportunities to improve and experiment.
Yes, this is in part driven by the threat of Amazon and the need to shape a proposition that ensures retailers remain relevant to customers in 3-5 years time, but it’s also fuelled by the growth opportunities this approach to innovation unlocks.
Who knows the role this shift in emphasis will play in assuring the future of any retailer or what the fate may be of an organisation that doesn’t embrace innovation in this way – thankfully I don’t know any retailers waiting to find out.