Co-opetition with Amazon works for The Children’s Place
While many retailers view Amazon.com as a competitive threat to be fought at every turn, others have found benefits in co-opetition — competing with the e-tail giant on one hand while taking advantage of the site’s traffic to sell on its marketplace. One case in point is The Children’s Place.
When Jane Elfers joined the children’s clothing retailer as president and chief executive officer in 2010, nine percent of the company’s sales were transacted online. By the end of this year, Ms. Elfers told CNBC’s Jim Cramer in a recent interview, she expects e-commerce to represent around 23 percent of the retailer’s total.
Ms. Elfers said that the move to sell on Amazon in 2014 enabled the chain to focus on growing sales across all its touchpoints instead of worrying about how to ward off the e-tailer.
“I think the combination of having 1,000 brick-and-mortar stores and a really robust e-commerce business is really part of the key to the success of The Children’s Place,” she told Mr. Cramer. “They [parents] bring the kids in, the kids get to pick what they want, and then that kind of feeds on itself and they go back and also buy on e-commerce.”
Success, regardless of where the sale transaction takes place, is about being focused on the needs of customers, said Ms. Elfers. In the case of The Children’s Place, that means Millennial moms, and it’s that very customer “who’s pushing us from a digital point of view even faster than we can push ourselves,” she said.
Being able to attract sellers to its marketplace has been a key driver of Amazon’s growth over the years. The site offers over 480 million products for sale. As a point of comparison, it has been estimated that Walmart sells somewhere between two and five percent of the SKUs offered by Amazon.
Jeff Bezos and company receive a big benefit from marketplace sellers. As Chris Petersen, PhD., president, Integrated Marketing Solutions, wrote on RetailWire in last October, Amazon only has “to stock less than 10 percent of the actual inventory” listed on the site and third-party sellers on the site help subsidize its “infrastructure and systems costs.”
- Children’s Place CEO: We have the ‘dream customer’—millennial moms – CNBC
- What is the online marketplace opportunity for retailers? – RetailWire
DISCUSSION QUESTIONS: Do you generally come down on the side of competition or co-opetition when it comes to Amazon? Will more large retailers follow the path of The Children’s Place and sell their products on Amazon and perhaps other marketplaces such as Walmart’s in the next few years?