Shoppers don’t differentiate between in-store and online, so why do some retailers continue with this charade? Your online presence either drives traffic to or from your store -- physical and virtual. Better you "cannibalize" yourself, than drive your shoppers into the hands of eager competitors. Online needs to support (not replace) the physical store and vice versa for the best shopping experience -- something even Amazon appears to be realizing as it increases its own brick & mortar presence.
The checkout, especially at the grocery store, is one of the biggest friction points to remove from the purchase process — so kudos to Amazon for freeing up 20 minutes of my Wednesday evenings and Saturdays. That said, I suspect it is one of many tactics on the slippery slope of convenience over price. Removing the checkout, removes the check & balance of "Wait, HOW much does that cost?" Great for retailers, not so good for shoppers on a budget. As retail winners already know, we're quickly moving to a world beyond price, even in an era of unprecedented price transparency.
Retailers and shoppers are discount addicted which has led to the elongation and blurring of traditional shopping dates. This year, Office Depot even kicked off Black Friday in advance of Halloween!As savvy retailers know, this constant run on margins is simply not sustainable. While some have resorted to their own shopping holidays — Amazon with Prime Day and Alibaba with Single’s Day — virtually all celebrate "micro-shopping" dates like Black Friday. So, as long as Thanksgiving exists, Black Friday will have relevance, but it is now just one of many "must-shop" dates and sorely in need of a reinvention.
Amazon has an undeniable lead in product search, but there’s 2 big reasons not to count Google out quite yet. First, Google is the search engine for everything else and has lots of opportunities to co-opt product placement within this context. Second, Amazon needs to have the discipline not to skew shopper search results for its own purposes — and judging by the make up of their self-reported Best Seller lists and ongoing controversy over fake reviews, there’s lots of room for improvement here.
While Amazon and Google appear to be dipping their toes into the physical retail world, Walmart is busy playing catch-up online, notably with the acquisition of Jet.com and now potentially Flipkart. From an offensive perspective, Walmart’s ability to link the company’s existing global network of more than 11,500 physical ship-to/ship-from supply chain locations to its expanded e-commerce presence could make the difference in this battle of the retail titans. From a defensive perspective, 50 percent of Walmart’s U.S. sales come from grocery and with this category poised to go online along with personal care, Walmart needs to up its e-commerce game to protect revenues and market share.
Digital is a powerful way to connect with shoppers. According to Google, 75% of shoppers that get helpful local search results are more likely to visit your store and that 60% of folks start shopping on one device, but continue or finish on another. So the big winners this holiday will be those retailers and brands that engage with customers across all channels and flawlessly execute a consistent and positive shopping experience across same.And this is no small feat! Today’s socially engaged and aware shoppers are more empowered than ever with competitive pricing, ratings, reviews and a multitude of other data points at their fingertips. This makes them uber quick to go elsewhere if their expectations aren’t being met.So this holiday, it’s more important than ever for retailers and brands to be as informed as their shoppers in terms of who is selling what, where, when, and for how much to deliver that seamless cross-channel experience.
During this year's back-to-school season, many retailers focused on private label, exclusive products and various assortment ploys to remain relevant with shoppers and avoid head to head price competition with Amazon and others. In a recent study by 360pi, we observed 44% of Staples's curated shopping list for 3rd-5th graders during back to school was private label. Likewise, 48% of all clothing featured in Target’s Labor Day ad was its private label, Cat & Jack. For the upcoming holiday season, we expect to see similar assortment tactics applied by retailers seeking to remain competitive and protect margins at the same time.
As a category expert vs. discount play Office Depot is on the right track, albeit too little, too late. Office Depot should become the go-to destination for the Soho market supporting all of their business needs like shipping, travel, remote office space, etc. As well, they should extend these same services to their corporate clients to help shore up their sliding B2B revenues.
Smart retailers maximize their marketing budget ROI by only spending on digital ads where they are competitively priced AND have product availability. Facebook's announcement helps address only the latter half of this equation, but that is still better than what Google offers today. Retailers need regionalized/zone pricing and product intelligence to address both key cogs in the marketing ROI machine.
Pure and simple, Walmart bought Jet to up its ecommerce game, both real and perceived. Jet gives Walmart the ecommerce DNA it was sadly lacking with shoppers and investors alike, notably with “acqui-hire” Marc Lore. On the surface, the $3B+ price tag may seem excessive, but what other options did Walmart have to compete and win against Amazon over the long term? Plus, there’s the residual advantage of keeping Jet out of the hands of someone else, notably a foreign competitor like Alibaba looking for US expansion.The trick to making this deal a success will be keeping the Jet people and culture over the long term, which will require a level of autonomy that Walmart corporate may struggle with.
Looks like Target is having an identity crisis. It’s no secret that today’s shoppers are bargain hungry, but Target’s promise of trendy affordable looks was previously delivered with a unique assortment that wasn’t readily available elsewhere. This recent promotional tactic is likely meant to shore up a failing assortment and seems to be part of a larger questioning of the retailer’s strategy and positioning moving forward.
The KPI for Amazon’s Prime Day has and will continue to be the degree to which they are able to sign and convert new Prime members. And this is followed closely by the creation and reinforcement of Prime’s perceived value to retain existing members.Creating a significant Prime membership tsunami allows Amazon to begin to exit the exceptionally competitive pricing battle they’ve been engaged in with omnichannel retailers since expanding beyond books.Amazon is seeking to tap into the shopper psychology surrounding paid memberships. In an effort to derive the “full value” of their memberships, shoppers actually become less price-sensitive and less likely to price compare since they've already "paid to play" with Amazon. Needless to say, this would be a double win for Amazon with increased unit movements AND margins.Additionally, a significant membership base makes Amazon more and more appealing to marketplace sellers, from small operators to large national brands. Prime success lets Amazon evolve from etailer to become the de facto direct channel to shoppers' eyes, minds, and wallets.