Study: One in four retailers feel paralyzed by Amazon
Retailers are eager to combat the force of Amazon, but they lack the strategy, marketing dollars and digital resources to do so.
Specifically, 44% of retailers do not know how to respond to the power of Amazon, according to “A New Path for Retail: Co-Existing with the Force of Amazon.” The report is from Bluecore, a commerce decision platform provider.
According to the study, 60% of retailers consider Amazon at least somewhat of a competitor. These companies also continue to grapple with free shipping, email communications and better access to customer data to mimic what Amazon does best: provide highly personalized and convenient experiences for customers.
Specifically, 63% of retailers believe free shipping for loyalty program members is one of Amazon’s most impactful consumer-facing technology initiatives. Yet, only 10% of retailers have significantly increased investment in technology to better compete with Amazon. Meanwhile, 29% of retailers haven’t even changed their data collection and analysis processes as a result of Amazon’s influence.
“Amazon exceeds at listening to its customers. Coming anywhere close to Amazon’s success in this area will require retailers to capture data on customer behaviors and preferences and analyze that data to fuel more intelligent decision-making and more personalized experiences,” said Jared Blank, senior VP of data analysis and insights at Bluecore. “The intent is fantastic, but many brands are severely limited in their abilities to obtain and digest this level of data. Even with an exceptional data and customer experience team, the risks are just too high.”
While better data and experiences are important, Bluecore’s experts have an achievable solution: accept Amazon as friend, not foe, and use the online giant as a distribution channel.
Some retailers have already embraced this opportunity and are selling products through Amazon — but not a majority. To date, only 30% of the retailers surveyed currently sell their products through Amazon. However, for 9%of those retailers, 50% of their sales come from this channel.
“Brands are at a crossroads. The choice is: compete against a company that spends more than $10 billion annually in R&D or leverage that incredibly powerful distribution channel,” said Blank.
With an increasing number of Amazon Prime customers and more consumers beginning their product searches on Amazon, “it’s simply ridiculous to think you’re going to succeed alone, Blank added.
According to Bluecore, the world’s largest brands are using Amazon as a distribution channel, and their revenue and earnings reports are seeing a sizeable uptick. “It’s not about failing to go it alone, it’s about learning to co-exist with this e-commerce behemoth – and embracing the right strategies for your own digital properties to continue to build brand awareness and loyalty,” he added.
Target in new partnership with hot online subscription company
Target is getting more pet-friendly as it extends its partnering initiatives with popular online retail brands.
Starting August 13, Target will sell toys and treats online and in its stores from Bark, the company that operates subscription-based online pet supplies retailer BarkBox. It's the first time Bark products will be available in retail stores.
Based in New York City, Bark launched in 2012 and has shipped over 50 million products to date. The brand, which reached profitability in the first quarter of 2017 and will surpass $150 million in revenue by the end of the year, is known for its fun and quirky toy and all-natural treat lines.
Target already has several partnerships with online brands, including most recently Casper, the mattress-in-a-box start-up.
In addition to its partnership with Bark, which includes seasonal collections, Target is bolstering its pet assortment in other ways. The company will be unveiling its revamped in-house brand for pets, Boots & Barkley. The line will feature 200-plus new items for cats and dogs.
The discounter also announced it will carry wet and dry from specialty pet food brand Blue Buffalo. Target is one of the first mass retailers to offer the line, which uses only natural ingredients. Target will also partner with style blogger Kate Arends of Wit & Delight for a pet clothing and accessories line.
“Almost 70% of our guests have pets at home,” says Christina Hennington, senior VP of essentials and beauty, Target. “So we saw an opportunity to become their ultimate pets destination by offering new and exclusive pet brands they can only find at Target, alongside everyday must-haves they need, saving guests time and money with every Target run.”
Target's expanded pet assortments are scheduled to start rolling out on August 13, and continue throughout the fall.
Five ways Walmart uses big data
Walmart is bullish on big data — especially when it comes to finding ways to better serve its shoppers.
Big data volume continues to grow, but Walmart is using it to the company’s — and its customers’ — advantage. By analyzing the robust information flowing throughout its operations, the discounter has gained a real-time view of workflow across its pharmacy, distribution centers, stores and e-commerce, according to a company blog.
Here are five ways that Walmart is using big data to enhance, optimize and customize the shopping experience:
1. To make Walmart pharmacies more efficient. By analyzing simulations, the discount giant can understand how many prescriptions are filled in a day, and determine the busiest times during each day or month. Big data also helps Walmart schedule associates more efficiently, and reduce the time and labor needed to fill perceptions.
2. To improve store checkout. While it is still only testing the process, Walmart is using predictive analytics to anticipate store demand and determine how many associates are needed to man registers. The data also reveals the best form of checkout at each store: traditional stations or self-checkout.
3. To manage the supply chain. The company uses simulations to track the number of steps from the dock to the store. The result: more optimized routes to the shipping dock. The strategy also pinpoints the number of times a product gets touched along the way to the customer. Big data also reveals transportation lanes and routes for the company’s fleet of trucks. This insight helps Walmart keep transportation costs down and more accurately schedule driver times, according to the blog.
4. To optimize product assortment. By analyzing customer preferences and shopping patterns, Walmart can optimize how to stock shelves and display merchandise. Big data also provides insight into new items, discontinued products and which brands to carry, the blog said.
5. To personalize the shopping experience. By analyzing shopper’s preferences, Walmart can develop a more consistent, tailored shopping experience. If a customer is shopping for baby products for example, Walmart can use data analytics to anticipate their needs then create personalized mobile rollback deals for these shoppers.
Whether it’s analyzing the transportation route for a supply chain or using data to optimize pricing, big data analytics will continue to be a key way for Walmart to enhance the customer experience, according to the company.