“How to compete with Amazon?”.
How do we sustain our topline sales amidst onslaught from online retailers?
These were the few questions that kept buzzing in the recently concluded Retail Congress in Dubai.
Post attending some of the keynote sessions during the retail congress, I am penning down my thoughts, providing tips and insights to the Middle Eastern retailers.
It is the Retail Renaissance time.
Given the current economic slowdown, wherein the customers have become “discount seekers”, bottom margins are depleting due to excessive promotions, selling the merchandise on full margins is a distant dream for many merchandise planners.
So how do you compete with Amazon and other online retailers which are thriving on their discounting model and excessive funding from venture capitalists?
The answer lies in the Basics of retailing…
Basics of Retailing
You make something happen in physical stores that can’t happen online.
If you think about the history of the department stores in the west, they were the circus when the circus wasn’t in town.
There was always something going on, with free candy flosses, art & crafts and performers and a pleasant place to gather & leisure activities and time out with the family.
The advantage with brick-and-mortar retailers is that they have amazing assets (stores), but they need to think about what’s unique about having a physical space and how the physical stores can be leveraged to do something that can’t happen in the digital world.
Experiential retail offers solutions.
Re-invent or Perish
The main challenge for the retail industry is to divert online traffic to physical shops.
Brands who are agile, adaptive to changes will prosper in the coming times.
Monitor market gaps and how you can fill those with your offerings or services.
Kohl’s uses strategic alliances to compete with online retailers of the likes of Amazon and eBay.
Case study: Kohl’s accepting Amazon.com returns.
Kohl’s has launched an interesting initiative to process Amazon returns, for example. It’s difficult for Amazon to process all those returns, and Kohl’s saw the fact that this would bring a lot of traffic to their stores as a positive effect, particularly younger people who would not otherwise go into the store.
For Kohl’s, this is a way of remaining relevant & filling the market gaps.
Learn more on Experiential retail, click here.
More Case studies on how retailers compete with Amazon.
Case study 1: Warby Parker
Founded in 2010, online eyewear retailer today has over 64 physical stores.
The internet-first company helped spearhead the trend of “online moving offline.”
The smart retailer uses physical stores to get new customers and insights into shopping behavior & then augment it with powerful digital advertising to boost brand visibility and social engagements with their customers.
They have also tested pop-up shops, stores on wheels (in decked-out school buses).
Warby Parker with their stores has created an experiential theatrical engagement by using photo booths in some of their stores, where you can try on the glasses and take pictures of yourself.
If you want to receive the picture, you have to give them your email address. And when you are browsing frames, they offer to send you a link with the frames you have seen.
They present this as a service but it’s also very valuable data, because they can link offline and online, and they know that you were in the store on a particular day and what frames you saw, and they can follow up with an email saying, “Do you want to buy this now?”
Check out the experiential green screen theme created in one of their stores. Exotic locations and lifestyle combined with stylish eyewear.
The use of augmented reality is also being tested by an Indian eyewear online retailer called Lenskart.com.
Modeled around the similar Warby parker business model, the chain also boosts of over 50 retail showrooms in India.
Check out their web content here (featuring beautiful Bollywood actress Katrina kaif).
Pushing the sales through CSR initiative:
Warby Parker’s initiative “Buy a pair and give a pair” has given the brand the social meaning. They have helped people in over 50 countries by providing eye care and lenses so that they could live meaningfully.
Case study 2: Charlotte Tilbury’s Magic Mirrors
At Charlotte Tilbury’s flagship store in London, customers have access to two touchscreen Magic Mirrors.
These fairytale-style screens allow you to ‘try on’ each one of Tilbury’s 10 signature looks – in as little as 40 seconds!
No more messing around with tester pots and samples. Now you can layer on the look digitally and get a feel for what suits.
There’s even the chance to change your look from ‘desk to disco’ and to email yourself a picture when you’re done, share the picture with your friends and get likes and votes on the preferred looks.
Customer experience is the new customer service.
Brands need to adapt to social selling and not just transactional sales.
I would continue my series on Experiential retail in my on-going blog series, my next one would be a case study on a leading retailer in United states and how Middle eastern retailers like Max fashions, R&B, Redtag could learn the rules of the game from it.
In case if any of my readers or retail fraternity member would like to learn more about my vision of retail 2025 and how they could transform and elevate their business model; feel free to reach out to me through my blog contact form or write to me on firstname.lastname@example.org
I would be more than glad to assist and help my retail fraternity.
About the author
Ritesh Mohan is a passionate retail professional with over 20 years in the Retail sector, handling some of the biggest brands in beauty, fashion and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in the Middle East region. Ritesh specializes in Retail management, Product development, and Brand Management, Retail Operations, Sales Management and Franchising & Business Management. He strongly believes in empowering business owners with his wisdom & experience of over two decades in the industry.