In response to a rumor that he had died and the subsequent newspaper coverage, American humorist, novelist and social critic Mark Twain said, “The reports of my death have been greatly exaggerated.”
The same could be said of the independent retailer.
In the Age of Amazon, can the local neighborhood retailer really survive? The answer appears to be a guarded “yes” provided the retailer is up to the challenge.
According to recent findings from the study, “Independent Retailers and the Changing Retail Landscape” local independent retailers have distinct advantages. 850 retailers were asked by Advocates for Independent Business in the November 2017 report to assess their situation. (Granted, a lot has changed in two years, but nevertheless, the conclusions are worth noting.) For example, most report that they are surviving better than national chains. In fact, they observe that Amazon is having a bigger impact on the chains than on them. GAP, Sears, Toys R Us, Payless Shoes, Victoria’s Secret, Macy’s and others in the U.S. constitute a retail apocalypse of 5,000 store closings in 2019 alone, according to MoneyWise. “Chains decided years ago to make price a strategy and, as result, they are vulnerable to online competition,” say surveyed retailers.
“Deep expertise, highly personalized service, the ability to create community and a rewarding in-store experience” were noted as advantages. Overwhelmingly, independent retailers cited better, personalized service in the survey as their strongest advantage.
While this may be good news, small independent retailers are also feeling the pressure, with nearly half in a survey conducted by MyTotalRetail.com saying that e-commerce is having a negative impact on sales. While 88% of small businesses say that “increasing sales” is their key business goal over the next 3 years, many are not ready to embrace the commitment and challenge of launching their own e-commerce offering which, as they see, will only provide some incremental growth. Instead, they are looking for solutions, which may have an e-commerce component in them, that will enhance their existing brick-and-mortar business.
TotalRetail goes on to cite that 11% of small business owners are making inventory diversification a key goal as another way to combat the Amazon effect. And that a small percentage are considering “hybrid retailing” by offering non-competing but complimentary shopping experiences—think a bookstore with a coffee shop. Almost a third (32%) want to improve their marketing performance but many lack the time or expertise to achieve improvement.
Of course, these are observations derived from surveys of independent retailers in the U.S. and provide an accurate overview of that marketplace. Likely the same could be said for independent retailers anywhere in the world. The owners of these businesses are entrepreneurial and must be self-reliant. But regardless of trends in marketing tactics, survival and ultimate prosperity must be framed from a brand perspective. Thinking about ones business as a brand and taking the approach as a brand marketer is the only way to “fight fire with fire” against major retail brands. What does this entail? At a recent industry conference for independent retailers, several brand experts offered perspectives on how retail brands can win in the age of Amazon. Here are nine:
1. Attitude: The attitude of retailers to identify their “burning platform.” What is it about their business that fires them up to be great — because just being “good” is not good enough. Are customers getting a good experience or are they getting a great experience? This is how retailers find their edge to win in the Amazon Age. When major competitors can outspend you, you compete on the quality of the experience, not the frequency of advertising.
2. Brand Totality: Retailers must understand that a brand isn’t just the logo on the sign in front of the store, but it’s the whole experience. It’s the store’s “brand essence” that’s being defined. This understanding is the basis for everything and it’s just as relevant to the small neighborhood retailer as it is to a global brand.
3. Engagement: Your aim shouldn’t be to “buy” you but to “join” you. This is a particularly important concept to grasp as Millennial consumers take a greater share of the market across most categories. This concept is based on the findings of a survey by Moosylvania of Millennials that “they don’t consume advertising, they participate in brands.”
4. Raw Power: To survive and thrive in the Amazon Age, retailers must remember that word of mouth and online reviews and influencers are 2.5x more powerful to influence discovery than Facebook ads, TV ads and YouTube ads combined, according to the same Millennial Brand Study by Moosylvania.
5. Find And Define Your Niche. “The middle is murder” and why many of the chains have become irrelevant. If your brand is all things to all people, it’s actually meaningful to no one.
6. Build Alliances: Brands, like people, are known by the company they keep. Often brand reputations can be burnished and growth can be accelerated by partnerships that are a win-win. Example: Flooring dealers working with interior designers or real estate agents.
7. Digital Marketing: This covers a large swath of communication strategies, from website to Google ads and SEM to social media to online reputation monitoring and management. As the TotalRetail survey indicated, many independent retailers worry that they are behind the curve– and they are. While traditional media will always play a role, retailers must become proficient with digital media in order to survive in the Amazon Age.
8. Make The Experience Special: The one thing even the most sophisticated e-commerce platform cannot duplicate is real human and product interaction in a virtual world. But just being courteous and knowledgeable isn’t enough. Shoppers expect to be “wowed”–even entertained–while they participate in the shopping experience. The use of in-store technology is often a means of doing this.
9. Master Easy. Complexity reduction and radical simplicity create a frictionless advantage. Where there is friction there is opportunity to improve the customer experience.
An organization’s competitive future is inextricably linked to its ability to nurture big ideas and the people bringing them to life. Retailers are no exception and those that prepare their people to out-serve, out-surprise and out-care will out-maneuver the competition.
Thanks to Derrick Daye, Alberto Brea, Norty Cohen, Todd Saunders, Frank Chiera, Chris Ramey, Terry Wheat and Lisbeth Calendrino for their advice and perspectives shared here.
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