Everyone knows that Amazon has ruled e-commerce for decades, and currently Amazon holds a staggering 50% online market share. This does not come as a surprise, and it is highly unlikely that Amazon will be dethroned any time soon. However, there are retailers that are rising and are worth watching in the e-commerce space. They may not hold as much market share as Amazon, but they are innovating, playing to their own strengths and in many cases, exploiting Amazon’s weaknesses.
Walmart: Low Prices, High Convenience
Walmart currently boasts 3.7% of online market share, spurred by a nearly 40% boost in e-commerce sales last year. The company attributes that growth to aggressive omnichannel initiatives focused on customer convenience.
With nearly 4,800 stores nationwide, there is a Walmart within 10 miles of most of the US population. Those stores are leveraged as distribution centers for e-commerce purchases as well as a means for customers to shop online and pick up items in the store. To make in-store pickup even more convenient, Walmart recently unveiled over 700 “automated pickup towers” that speed up the process. This has been a win-win for shoppers and the company: Customers get the convenience they want, while Walmart controls margin-killing shipping costs.
Home Depot: Personalizing Highly-Segmented Audiences
With 1.5% share of the online market, Home Depot is crushing its competition online by focusing on personalization and a seamless omnichannel experience.
Historically, one of the major e-commerce struggles of home improvement retailers has been personalization. Home Depot serves both contractors/tradespeople and the “do-it-yourself” general public.
Commercial shoppers typically know exactly what they want and shop almost exclusively on their smartphones because they are never in front of a desk. They are fairly straightforward in what they want and how they want to be marketed to.
Public shoppers are much more difficult to pin down because they may need to purchase small items like trash bags and paint brushes, or they could be looking to drop $50,000 on a kitchen and bath remodel. Public shoppers can shop online when they need to, but when making major purchases, they need to visit the store. It can be impossible to classify customers because home improvement projects are unique and often one-off.
A strategy that successfully caters to all of the segments of the Home Depot customer base sounds like a challenge, but the retailer seems to have cracked the code. They embrace the fact that many of their products are “e-commerce unfriendly” and that their customers have very unique needs at very different times.
To overcome these challenges, Home Depot invested in an omnichannel strategy that provides shoppers with options for each unique need. Small items can be ordered quickly and delivered to the home or picked up in the store. Larger items can be flagged and the shopper can visit a store to talk directly to a pro about their needs. Additionally, there are augmented reality options that allow users to take photos of their rooms and overlay Home Depot products – everything from cabinets to paint colors – to see how they would look. The experience is seamless and user-friendly, and is paying off in spades.
Best Buy: The Experience Center
While electronics stores like Circuit City and Radio Shack have shuttered, Best Buy is flourishing and currently holds around 1.3% of the total online market. A pioneer in buy online, pick up in-store – they’ve been doing it for nearly a decade – Best Buy has been able to stay ahead of customer trends and preferences better than their competitors. They offer same-day delivery in nearly 40 markets, free shipping on most orders and a price match guarantee.
Part of Best Buy’s success can be attributed to the fact that they have found a way around Amazon. They have built up their in-store service as a resource for people who want to see the electronics they are purchasing, talk to an expert and learn how to use their devices before placing an order. Exclusive products, their price-match guarantee and convenient shipping options prevents customers from testing products in the store and buying them on Amazon, solving the challenge that many retailers have of “showrooming” customers.
What Can Retailers Learn From Walmart, Home Depot and Best Buy?
Part of the reason these retailers are killing it is that they are playing to their own strengths and delivering exactly what their customers are looking for. Amazon is popular, but it does have weaknesses and no matter how much it wants to be, Amazon simply can’t be all things to all people. By understanding what a unique customer base wants from an online shopping experience and delivering it, retailers can carve out more market share for themselves like Walmart, Home Depot and Best Buy.