It is no exaggeration to say that Amazon has disrupted the retail world over the last two decades, but headlines like, Amazon Crushes Another Retailer! and Major Retail Chain Lays Off Employees; Amazon To Blame! don’t tell the full story. It is true that many retailers have struggled to compete in the era of Amazon, but other retailers have used this disruption as an opportunity to grow.
Best Buy: Giving Customers What Amazon Cannot
As electronics stores like Circuit City started shuttering a few years ago, Best Buy was written off by many as dead in the water. Who would go to an electronics store when you can buy what you want online? But in 2012, Best Buy decided to take on Amazon head-on.
First, they began matching prices of both Amazon and big-box retailers, taking price out of the customer’s buying decision. Next, it focused on creating an in-store experience that shoppers could not have buying online or visiting a megastore. Finally, it created micro-experiences within the store. Shoppers can visit an “Apple” section, a “Samsung” section, etc. and speak directly with employees who are experts in that brand. As a result, sales and profits have climbed and the return on Best Buy stock beats Amazon’s rate of return.
Home Depot: Capitalizing on Amazon’s Limitations
Home Depot is one of the best-known home improvement stores in the world. A vast majority of the products that Home Depot sells can be purchased on Amazon. However, if you are doing a home renovation project, Amazon isn’t necessarily a homeowner’s best bet.
Amazon does not sell or ship things like countertops, drywall or lumber. They cannot design you a new kitchen or bathroom, and they cannot install new doors or windows. Home Depot saw an opening and they began positioning themselves as the only one-stop shop for home renovations. They have also expanded their professional services business that offers bulk pricing, rentals and other benefits to licensed contractors.
Kohl’s: If You Can’t Beat ‘Em, Join ‘Em
Kohl’s has taken a different tactic than other retailers. They’ve actually partnered with Amazon. Kohl’s now accepts Amazon returns in their stores to help drive traffic. They’re also utilizing a concept similar to Best-Buy’s micro-stores, dedicating space to Amazon.
Customers who are interested in things like Amazon Fire and Amazon Echo likely want to test them out before they buy. However, they don’t have that opportunity online. At Kohl’s locations, they can see, touch and test Amazon-branded products, buy them, and take them home that day. For Kohl’s, it also means increased foot traffic looking at their products.
Mall Of America: Still Relevant After All These Years
While local shopping malls across the country are closing their doors, Mall of America, one of the biggest malls in the world, has managed to remain relevant in the Amazon era. They still maintain a lot of their original appeal – roller coasters and amusements alongside retail stores – but they are changing their approach to appeal to a younger, trendier audience.
Mall of America recently became an Amazon Locker location, which means local residents can have their Amazon packages shipped to the mall where they will be kept secure and away from the elements. They have also begun drawing in stores that attract a younger customer base like Zara and Anthropologie. Finally, they keep dedicated space open for brands that want to host pop-up stores, or online retailers looking for showroom space. Combining these efforts ultimately drives more traffic to the shopping center.
The Common Thread
These stores didn’t develop strategies to tackle the Amazon problem on a whim, nor has their success been a matter of luck. They’re using hard data to better understand customer motivations and needs. By leveraging this data, they’re able to develop strategies to accommodate the changing tastes of consumers, which in turn allows them to either meet needs Amazon cannot or complement Amazon in a mutually beneficial way. If you are looking for ways to compete with Amazon, ask yourself one question—how can you better meet your customers’ needs?