Still hope for retail’s Davids, despite the Amazon Goliath, says analyst
There are certain types of stores that you don’t see as often in today’s shopping centers and malls: bookshops and record stores are perhaps the most obvious, but there’s a general prevalence of larger chain stores representing big brands, and fewer small independent outlets than ever before.
Retail industry pundits are quick to point the finger of blame at internet shopping habits, and king among those online stores in the US and the UK is Amazon.
At a talk given at last week’s Tech. conference in London, Patrick Munden, global head of retail and marketing at Salmon explained how Amazon has risen in prominence in the retail world and will continue to do so, in all likelihood.
But it’s not all doom and gloom for retailers wishing to make their mark, he said, either in brick-and-mortar storefronts or online. And while no-one’s likely to get rich very soon selling paperbacks online, there are notable success stories, Munden explained.
To begin, though, some notable headline statistics: by the end of 2018, 20 percent of all online retail in the UK will go through Amazon, in one form or another. In the US, the figure is over 40 percent.
Amazon’s operating stance is quite varied: some products it sells itself, some are sourced through third parties that use Amazon as a portal (like Alibaba’s online stores in China, for example), and the company rakes in more cash by sponsored search results and hosting online stores for other, typically small businesses.
But some products just don’t fly online. In the Salmon/Censuswide survey, “The Future Shopper,” from which Munden quoted, only 14 percent of respondents said they were happy to buy health and beauty products online from an established brand, for example.
And 32 percent said they wouldn’t buy luxury brands online at all. Consumers still value the shopping experience in the flesh, it seems – albeit at the high end.
What’s essentially a mail-order business like Amazon can’t, of course, tick all the boxes. Customers like to size up certain purchases in person (clothes, shoes) and pick alternative choices at the same time, to take items home to try them out, or on. Returning items bought and considered in this manner is part of a personal shopping experience that people still enjoy. There’s hope for the mall, then.
Any retailer looking for a market position can, of course, use Amazon virtual real estate if it wants. Certain retailers reject this option as they feel it cheapens their brand, while others embrace the opportunity, or have it as one option in a multifaceted selling strategy.
Where small independent retailers can excel, Munden said, is in areas that can exhibit three positive offerings:
- Curated collections, carefully chosen for their taste and relevance hold serious weight with consumers.
- Specialism in a particular field or market segment – wiggle.com for keen cyclists is a fine example.
- Provision of expert help. Customers need advice for certain purchases. Training shoes which aid the pronating athlete? The optimum length of sea-fishing rod for an 11-year-old? Customers still want to ask questions of staff who know their onions.
And despite the massive rise in purchases made down this year’s most fashionable channel – voice assistant (guess who leads that particular segment share?) – 63 percent of customers believe their technology expectations were not met by retailers this year.
That means that even the slickest of online, technologically-driven shopping experiences still can fail to deliver in some way.
Fortune favors the brave and may favor even more the technologically innovative, it seems. There’s hope for retail yet, even if Amazon casts a long shadow.
30 November 2023