This company was originally founded as a local bookseller but gradually sprouted into an iconic e-commerce enterprise, the world’s largest online marketplace, and one of the most influential business phenomenon’s. This company’s name was Amazon, as you probably already guessed.
In two recent decades, it expanded into a gigantic e-commerce corporation, distributing a wide variety of goods, including groceries, books, electronics, housewares, video games, software, motor vehicle parts, and mostly anything you can think of. The corporation’s annual revenue, by the most conservative estimates, exceeded over $470 billion in 2021, and it doesn’t stop growing and growing even faster each year. There is no wonder why ever since its beginning, Amazon has jeopardized most retail segments.
But while a mass of famous retail companies worldwide have either already disappeared or are on the verge of extinction in the face of a rather aggressive Amazon expansion, some retailers remain – figuratively speaking – ‘vaccinated’. Those segments seem less vulnerable to competition or suppression caused by absorption or squeezing out of the market. Some retailers successfully withstood this retail tsunami and won the battle for their customers. So, what retail segments have proven to be less affected, and what can be done to improve the survival rates of other retail segments?
I started contemplating these questions when a brand new retail shopping plaza held a grand opening next to my neighborhood. I curiously watched over half-hundred stores get filled with new and excited business owners. I just couldn’t get over how the range of stores represented in that particular plaza differed from how a typical plaza looked just a short 7 – 10 years ago.
Other than local bicycle shops, electronic games, and home appliances stores that have disappeared, the most noticeable fact was not a single clothing, shoes, accessories, or another fashion store in the variety of stores, not even a sports or children’s clothing store. The entire segment that used to occupy probably over half of the commercial squares in any plaza up until a decade ago was simply gone. Fashion retail still exists, but it got pushed into a limited number of successful malls.
So who opened stores in the new plaza? Mostly different personal and business services (barber, accountant, massage, property realtor, etc), speciality stores, and of course, restaurants. In stark contrast to fashion retail, those segments look seemingly less interrupted by Amazon. It’s easy to explain why a barber and an ice cream shop are still there, as they naturally don’t get much competition from Amazon (and other online retailers), and if you look around your house, anywhere in the country, you will probably notice the same trends. Some segments of retail are almost extinct now.
THE RENAISSANCE OF BRICK-AND-MORTAR STORES
But, the bright spot is, despite the widespread decimation of traditional businesses, some of them do not only survive but also thrive. I find that one very thick line connects the unaffected retail segments to the business that survived despite being in the eye of the storm. Simply put, it is THE EXPERIENCE.
As the CEO of SleePare, a small boutique chain of mattress stores, I was honestly deeply disturbed, wondering if we would be able to get customers back to our showroom during the terrifying spring-summer of 2020. Luckily they did come back to SleePare, and millions of other retail stores. If 2021 did teach retail owners and researches anything, it should be that customers DO want to shop outside. They want to meet other people, get professional service, touch, feel, try, smell, and leave a shop with an item in their hand. What they DO NOT want is to drive through traffic to see boring generic rooms called stores, where they will be offered to buy overpriced items.
Let’s demonstrate how being in Amazon’s path doesn’t necessarily mean a chapter 11 filing. The best example I can think of is Barnes and Nobles. As Amazon originated from an online bookstore, you would expect B&N to be the very first victim, right? Yet they are here, and their stores are larger and nicer than ever. After taking a major hit, they recovered, and more than 600 retail stores across all 50 US sold over $3.5 billion worth of books, stationery and games – everything you could get on Amazon. How can that be explained?
If you have to think what emotion the last visit to Barnes and Nobles triggered in you, you might say it felt cozy, felt inviting, it was a bit of a social experience, you might remember the great guy recommending a book, or you might just remember the strong scent of coffee, coming from the Starbucks that was cleverly placed near the entry. But the important thing is, you do remember this store triggering some feelings. You wouldn’t be able to associate the same intensity of feeling a visit to most store visits. And I think this is where they won their business back when they realized you weren’t there for only the book or any other item; you took the drive there to get the package deal and Item + Experience.
And you would probably end up going again to B&N, Lululemon, and other retail businesses like them that were able to build a community around them and provide a memorable experience added to the products on the shelves.
BUILDING AN ‘AMAZON-DEFENSE’ STRATEGY
Here are some of the conclusions and points I consider vital to remember by every business owner in terms of Amazon and other giants’ hegemony.
● Provide customers with the most professional advice.
Note that many of the surviving retailers are specialty stores. People buy their coffee in a boutique Nespresso store, but not online, because they wish to enrich their ordinary shopping experience by a chat with salespeople, to get a professional recommendation, find new ideas and finally smell and taste a cup of fine espresso. The absence of pro-service can deprive customers, even huge retailers. The example of ToysRus bankruptcy, I think, is a monster-size example of that.
● Suggest unique.
It might be a unique business concept, goods, atmosphere or experience. Brick-and-mortar retailers may control clients’ behavior and influence almost everything that the client sees, hears, and feels while shopping. Try to please your clients by displaying new and unique products, not just your best sellers, to make the visit more interesting and pleasing. In the chase for uniqueness, some malls now provide special programs that offer lower or no rent to new approaches and retail concepts to attract customers into the mall.
● Build a community of clients.
Keep them up to date on the relevant news, discounts, and local events throughout omnichannel approaches. Give your customers better reasons to come back than just shopping. Eventually, all we are looking for as customers are networking in a comfortable and friendly environment.
● Remember the experience.
You probably invest a lot in selecting the items you will display. Now try to think less about those products lying on the shelves and think about the other item that you are selling – the experience customers are getting in your store. Experience can be anything from store design, staff training, scent, follow-up methods, and anything else that will make them wear smile when they leave the store.
I am positive that retail can survive and thrive as long as the customers are still humans and the experience is past of the deal.