Dear Average Retailer,
It’s rough out there. Here’s something else you’re up against:
If you’re smart, a key part of your strategy to compete with Amazon (even though they’re probably more of a “frenemy” rather than outright competitor) is likely to leverage your stores as fulfillment centers and to provide customers with a sensory experience that online pure plays can’t offer.
Well, you’re not the only one thinking that way. Walmart just announced that it will invest $2 billion over the next two years to better connect its ecommerce operations to its stores. When asked about online competition, Walmart’s CEOs summed up the company’s strategy: “First, win with stores.”
You might not be worried about Walmart, thinking there’s little chance your customers would go there to find alternatives to your products (especially if you’re a fashion brand). But what about Target? They are likely more worrisome. And they’re onto the same game – although planning to invest a meager $1 billion.
At the IRCE conference earlier this year, I heard Target.com president Jason Goldberger say that when asked how Target.com is going to beat Amazon, he answered that Target.com won’t – Target will.
By the way, Walmart also announced raises for in-store associates to attract higher quality staff. So, now they’re not only after your customers, they’re after your employees too!
What’s the average retailer to do? Do you have several billion dollars lying around to invest in the same way? Probably not. But don’t give up hope. Your best chance for success may be, paradoxically, the very fact that you’re not as big as these other companies. No matter how much the Walmarts and Targets of the world spend, they’re still behemoths. And behemoths are often slow to respond to evolving consumer expectations.
And therein lies your edge – use your size and agility to keep ahead of these big investment dollars. In fact, that may be an edge even for Target with its marginally smaller size compared to Walmart.“Target’s more nimble size allows agility to drive sustainably higher online growth,” wrote the financial analyst firm Cowen & Co., in a recent note.
It’s true that there’s real business value in agility. Check out the report by L2, which documented this, and in fact, highlighted how cloud commerce platforms enable the kind of agility needed to succeed in today’s dynamic market.
So, in your potential for agility you’ve got a fighting chance, for sure. Don’t squander it.
Good luck out there.