To many retailers today, Amazon.com seems unstoppable. The website that ate retail has overtaken a fellow titan, Wal-Mart, as the second-largest seller of consumer electronics, and it has category No. 1 Best Buy in its sights.
As retail witnesses the shuttering of former retail heavyweights, including Sports Authority and Sports Chalet, and the slimming of long-term players, including Macy's, Walgreens, and the Gap, smaller retailers are often left wondering whether there is, in fact, a path to success when you don't have millions to spend on marketing.
Here's the key: An underdog doesn't win by beating a giant at its own game, but by outwitting, outmaneuvering, and out-strategizing it.
Offering hope to retail are the stories of nimble retailers, including Ulta, TJ Maxx, and H&M, which are continuing to grow and open new stores year after year. Those successes prove that although midmarket retailers might not be able to compete with Amazon on price or inventory, they can compete—and win—by harnessing the power of their data and getting creative.
Here are five ways midmarket retail can stay nimble in the face of the Amazon giant:
1. Clean up customer data
Data is the lifeblood of retail, and it's more plentiful and valuable now than it has ever been. But retailers often have multiple siloed databases hindering their ability to create, then benefit from, a complete picture of their audience.
With a staggering 88% of companies reporting that bad data has affected their bottom line—to the tune of roughly 12% of their revenue—the importance of clean data should not be underestimated.
For retailers with multiple types of purchase paths, ignoring data siloed in e-commerce, catalog, and brick and mortar databases is like dragging around a 50-pound weight when trying to outmaneuver the giant. For direct-mail retailers, if even 10% of your database has inaccurate contact information, that means that 10% of your direct mail campaigns have zero chance of being effective.
When looking at data from this perspective, the value and ROI of keeping it clean become apparent pretty quickly. Your data needs to be consolidated, accurate, and frequently updated if you are going to be able to move and personalize marketing efforts at customer speed.
2. Identify missed opportunities
Recently, home-improvement retailer Lowe's recognized it was losing billions of dollars per year because consumers were feeling so overwhelmed by planning their home remodels that they gave up altogether, without ever making a purchase.
That's when Lowe's decided to create an in-store virtual-reality environment that enabled consumers to design their remodel using VR tools and see their new house as if they were already standing in it. The resulting press and customer interest were a two-fold win for the nimble retailer.
With a clear view of your data and a little creative fuel in the engine, you can identify sinkholes in the customer journey and adapt your strategy to take advantage of missed opportunities.
3. Take chances
As we move through the digital era, midmarket retailers will need to understand that the product and shopping experience they offer is never going to be "finished." The tried and true is giving way to an expectation of ongoing, uniquely crafted experiences that create a sense of trust and curiosity with customers. The need for brands to evolve in accordance with modern trends necessitates an agile, anticipatory mindset.
Often demonized for price-gouging, Whole Foods recently decided it needed to try something different: It went into a Millennial-heavy, hipster-dominated section of Los Angeles and created a store that bucked its reputation as a high-priced grocery chain. The retailer created a tailor-made environment for its audience, including, writes AdAge, "a self-serve teaBOT that will brew a customized cup in 30 seconds, iPads for ordering to-go, a dog-hitching station out front, a coffee shop with beer and wine, organic fruit, responsibly harvested seafood and antibiotic-free meat." All delivered in a more affordable package then the flagship chain.
In this instance, Whole Foods took a chance on a new business model to show Millennial audiences that it understood both budgetary concerns and the desire to have a well-crafted shopping experience.
4. Embrace beacons
Beacons will drive $44 billion in sales this year, up $4 billion from last year, according to predictions. Though some of the initial uses of beacon technology might not have had perfect landings with customers, who felt they were "creepy," the opportunity is significant for retailers that can create valuable experiences with this new(ish) technology.
When used to bombard every passerby with a faceless promotion, the beacon is no better than poorly calculated ad retargeting or aggressive email spam. However, when beacons deliver personalized value based on previous shopping preferences and behaviors, retailers open opportunity to drive revenue they might not have captured otherwise.
5. Look for smart partnerships
David did well against his giant adversary, but imagine if he had some help from a friend. By partnering with like-minded brands and organizations, retailers can gain valuable exposure to new audiences for significantly less than it would take to acquire those audiences independently. In addition, partnerships allow brands to capitalize on the trust their partner has already built with customers.
A great example is the 2016 integration between Spotify and Runkeeper. Resulting from the realization that running and music go hand in hand, the cross-pollination opened both sides to a new stream of users. Now runners can synchronize the pace of their run with the beat of the music, and music lovers can access their own beloved playlists for inspiration during their workouts. A win-win.
* * *
Amazon might continue to dominate the retail scene in the years to come, but that doesn't mean the midmarket won't have an opportunity to thrive alongside the mighty giant.
By harnessing and applying the powers of technology, creativity, and innovation, retailers large and small can carve out opportunities with the digital natives of tomorrow and continue to give goliath a run for his money—for years to come.
Continue reading "Davids vs. Goliath: Five Ways Retail Marketers Can Stay Relevant in the Age of Amazon" ... Read the full article
Subscribe today...it's free!
MarketingProfs provides thousands of marketing resources, entirely free!
Simply subscribe to our newsletter and get instant access to how-to articles, guides, webinars and more for nada, nothing, zip, zilch, on the house...delivered right to your inbox! MarketingProfs is the largest marketing community in the world, and we are here to help you be a better marketer.
You may like these other MarketingProfs articles related to Marketing Strategy:
- Three Ways to Optimize Your B2B Direct Marketing Program in 2021
- What Are You Going to Do About Your Outdated B2B Buyer Personas?
- Wonderfully Weird Ideas: Scott Trobaugh and Cliff Lewis on Marketing Smarts [Podcast]
- How to Create Successful B2B Relationships
- Senior Marketers Are (Very) Optimistic About the US Economic Outlook