You may already know that Amazon passed up Microsoft this year to become the biggest company in market value, becoming the world’s most valuable brand. The company started in 1994, which means they did it in just 25 years. They are now a staple in homes throughout America and most of Europe. It’s no wonder how other major companies are changing their brands to imitate Amazon’s way of doing retail.
How Has Amazon Shifted the Way Major Retailers Operate?
Amazon shifted, and has been completely transforming, the way retail works in the world. People started realizing they don’t have to buy products through the old brick and mortar way. They can buy from their own homes, and not have to wait weeks for their new item to ship. Amazon’s ability to deliver right to the front door became its main selling point. This forced other retailers to start rethinking how they did their transactions. People now expect other major sellers to provide the same convenience. After all, that’s how competition works, right?
Amazon Focuses on the Ongoing Consumer Shift
The needs and wants of consumers are constantly evolving. Amazon hones in on how their customers operate. To surpass its competitors, Amazon expanded its brand to include grocery items and food delivery. Now, even major grocers are forced to follow in their footsteps. Fast-food chains and delivery services are now everywhere.
They have become rivals for all leading industries in the commerce business. Amazon has now expanded its line of smart speakers, introducing Alexa into people’s lives. They are neck-and-neck with Netflix and HBO, for their online service for movies and television. Spotify has a run for its money competing against Amazon’s music streaming. With Amazon Go, people now have cashier-less stores where they can quickly go in, get what they need, and get out. They pounce on innovative opportunities to meet consumers one step ahead in every e-commerce and physical desire.
The Use of Data for Exponential Growth
How has Amazon’s success reached its heights? Amazon does more than just sell items in e-commerce. People trust Amazon with their personal information. They even confide in Amazon with their daily conversations, by having Alexa in their homes. Amazon can use the information from purchase history and search results to speed up their research abilities, and get ahead of demand. It may be something as simple as suggesting items similar to something they have already searched. It may also be more sophisticated, like coming up with an entirely new branch of service.
Even though they are a huge company, they have succeeded to build personalized relationships with their customers. By appealing to the needs of efficiency, speed, and low prices, they have developed loyal purchasers who now consider Amazon their go-to service. People know that they can buy from Amazon for everything, from large electronics to home furniture to daily needs, like groceries and cleaning supplies.
Amazon’s Dynamic Supply Chain and Shipping Capabilities
Amazon’s supply chain starts with its warehousing. They have intentionally placed their warehouses near the world’s major metros and population hubs. They keep up their inventory to ensure the fastest acquisition and delivery possible. They have organized the packing and shipping process to work with a combination of humans and pack-and-ship robots, which ensures that they are ready for delivery almost immediately.
Amazon challenges other online retailers by its wide variety of shipping options. They’ve even moved beyond their 2-Day Free Shipping policy. Now, they offer delivery within 2 hours. How do they manage this? They employ many strategies for getting the delivery job done. They have been using delivery trucks and vans as well as private deliverers who can work any number of hours depending on their personal schedule. Bike deliveries even exist in some areas.
On the other end of the technology spectrum, drone deliveries are happening right in people’s backyards. Amazon Air offers delivery within 30 minutes! Of course, there are still some restrictions. Customers need to live in somewhat limited locations, and they have to buy an Amazon-branded landing mat for delivery. But, the service will be expedited soon; there’s no doubt.
Which Retailers Have Been Left Behind by the “Amazon-ification” of Online and Brick and Mortar Retail?
While a number of companies have shifted their practices to follow in Amazon’s footsteps, many retailers have failed to keep up with the fast-paced growth Amazon’s innovation has required of its competitors.
Borders had once been one of the major pioneers in the mega bookstore business. So, why did they fail? In short, they didn’t keep up with the rise of technology. While their audiences shifted consumer preference from paper copies of books, they didn’t adapt accordingly. They invested in huge physical stores, and prided themselves on tens of thousands of titles in their selection. However, in the mid-90s, when Amazon was making its rise, they actually outsourced their sales to Amazon rather than beefing up their own online service. They banked on consumers buying physical hard copies of books, and did not take into account the massive decrease in physical book sales.
They put out a heavy selection of CDs and DVDs when the world’s trend started going digital. Instead of focusing on online sales like other companies such as Barnes & Noble were doing, they expanded their brick and mortar stores. Inevitably, they had to file for bankruptcy protection in 2010.
Circuit City was a booming electronics store in the 80s and 90s, but they also filed bankruptcy protection in 2008. They prided themselves on large warehouses, but their locations were out-of-the-way and inconvenient, causing shoppers to gravitate towards retailers in convenient and popular areas. They made themselves unavailable to consumers, which is the opposite of what retailers should do.
Then Circuit City started missing out on opportunities for growth. They weren’t aggressive in the gaming industry. They stopped selling home appliances, which limited their supply to meet the needs of their buyers. More importantly, they neglected to build up their e-commerce presence. Amazon’s website ran laps around them, and they shrank into nonexistence.
Which Retailers Adapted to the Rise of E-commerce?
While these businesses went under, the “Amazon-ification” of other major retailers rose to the challenge presented, and adapted. These companies shifted their strategies. But, they didn’t adapt and then stay complacent. They keep moving forward, and had been getting more innovative. Some of these top retailers include:
- Barnes & Noble
Target has adapted to shifted consumer habits by offering new brands to the market. They draw customers into their stores by inviting them to pick up products they bought online. They have opened smaller versions of their stores, placing them in innovative locations like university campuses and local urban communities. Their success is due to more than just renovating their stores, and marketing to customers. They have cornered their own market in the e-commerce approach.
With Cartwheel and Target Restock, they provide a rewards program, as well as a grocery delivery service. Customers who use Cartwheel can build up rewards on every purchase, and then use them for rewards and discounts. This grows Target’s customer loyalty base. Those who use Target Restock can order groceries and other items through the app, and get delivery for just a $4.99 flat rate.
Kohls has partnered with Amazon by providing an Amazon in-store return feature. As a result, they have capitalized on Amazon’s success. They make an additional profit, because customers come to pick up an item ordered online or return something to Amazon. While there, they statistically tend to make additional purchases.
They expanded their take on e-commerce by opening up several smaller, separate locations just for pickup of online orders. They cater to the customers’ demand for convenience and efficiency.
Walmart has shifted and rebranded its e-commerce platform. They revamped their website drastically. They went from giving customers the impression that they were a cheap warehouse with lesser-quality products that were cheaper than most, to dressing up their new image. Now, their e-commerce brand is more personalized, by showing photos of happy people enjoying their products. They have made themselves seem like a family brand, and it raises their image quality.
They continually acquire category-focused, e-commerce brands, like Eloquii and Bare Necessities. Their website is now more interactive, by suggesting similar items to customers. They also offer in-store grocery pickup. Since they have so many physical stores, they have a leg-up on Amazon for pickup convenience.
Barnes & Noble
In contrast to the failure of Borders, Barnes & Noble embraced e-commerce in their business. They came out with their own Ebook reader, the Nook. The Nook is in direct competition with Amazon’s Kindle, and caters to the decline in hardback sales. It promotes an environmentally-friendly mindset. At the same time, it saves the consumer’s money. Ebooks are much less expensive than physical books because they cut printing costs. Barnes & Noble staked its future on the rise of digital technology in e-commerce, and has emerged successful because of it.
There is a bottom line in taking a look at the “Amazon-ification” of major retailers. Companies like Circuit City stuck with traditional, old-fashioned habits, and did not stretch their capacities to meet growing e-commerce demands. On the other hand, other retailers continue to strategize methods to expand and invent new ways to get ahead of the pack. These are the ones that succeed, and end up at the top of e-commerce brands.