There is no doubt that Amazon is upending the retail landscape. The number of retailers filing for Chapter 11 bankruptcy protection in 2017 is headed toward its highest annual tally since the Great Recession. Brands like HHGregg, The Limited, Wet Seal and Gander Mountain have already filed, and Sears recently stated it doesn’t know how much longer it can survive.
Consumers’ love for Amazon is echoed in Prophet’s Brand Relevance IndexTM, which ranks Amazon as No. 2 among more than 300 brands.
But a closer look at our research reveals that many brands are, in effect, making themselves Amazon-proof. They gain relevance by excelling at aspects of retailing that Amazon—for all its pragmatic brilliance—just can’t touch. (At least not yet.)
Sephora, for example, places 10th overall, but moves even higher on our measures of customer obsession. So does Costco (No. 30). And while Etsy is No. 23, it zooms to No. 2 when ranked on the sentiment “makes me feel inspired.” Only Pinterest did better.
These brands are making themselves relevant to consumers in ways Amazon finds difficult since it is still (at time of print at least!) primarily an online retailer.
5 Strategies to Improve Retail Customer Experience
Here are five lessons retailers—and in fact, many brands—can adapt to protect themselves against the Amazon effect:
1. Create a more immersive, engaging customer experience
The bliss of Amazon Prime, of course, is getting exactly what you want in a few clicks. But sometimes, people want to spend more time shopping, not less, and brands that understand that are way ahead of competitors. This is where retailers need to up the ante with customer experience.
Women want bras that fit, for instance. Based on that insight, Victoria’s Secret (No. 43) equips all associates with a tape measure, training and plenty of product solutions. Nike (No. 7) hosts weekly run clubs out of its stores, while Lululemon offers in-store yoga classes.
This engagement extends beyond the store, too, with digital technology that makes shopping more meaningful. For example:
- Sephora uses augmented reality to let women experiment with false eyelashes or learn how to use contouring makeup. Lowe’s has created holographic rooms for DIYers to explore layouts, fixtures and colors before they pick up a sledgehammer.
- Nike stores include run analyzers and basketball courts to photograph people in action, using the images to make more specific product recommendations.
- At The North Face (No. 46), IBM Watson’s AI capabilities help customers find the perfect product. Mirroring in-store conversations, Watson can take unstructured text such as “I need a jacket for biking in Chicago winters” and deliver personalized recommendations.
2. Reward the treasure hunters
Some shoppers love to think of themselves as treasure hunters, with each trip to a favorite store giving them a chance to “win” by finding something unexpected, beautiful, rare or maybe just a tremendous value.
Knowing how to reward these dedicated hunters is what fuels the success of brands as diverse as Etsy, Costco, Target, eBay and T.J.Maxx. These brands make the chase meaningful by constantly showcasing new merchandise, sharing valuable content about its source and making it clear that it won’t be available forever.
Target is reimagining its store with two entrances, each with a specific guest need in mind. For the guests that want to browse and discover, they’ll be able enter through one entrance to find displays of exclusive brands and inspiring seasonal moments.
3. Inspire consumers
The ability to distinctively inspire consumers is one of the four key drivers of relevance, and it is nearly as powerful as pragmatism. Specialty retailers have an innate advantage here because they’re steeped in passion points that no mass brand can match. The smart ones fuel those passions.
Visitors to the North Face stores, for example, get a chance to experience a world-class hiking experience through a virtual reality headset. At L.L.Bean, shoppers can watch speckled and rainbow trout swim in a vast aquarium.
Meaningful content creation also inspires, from the deeply educational (like Lowe’s how-to videos) to advocacy and purpose (such as Patagonia’s messages about protecting the planet). Content creates emotional connections. Retailers can learn from storytellers about building those bonds, and then stay current by delivering them on the best digital platforms: Victoria’s Secret is using 10-second clips to create stories on Snapchat, for example.
4. Shopping is social, so make it more fun
Often, people want to share their shopping experience with friends and family. A Chicago Nordstrom has added a bar to its menswear department, for example, making it even more fun to linger over that tie selection. Digitally, this works too: Smart mirrors in stores make it easy to send an image from a dressing room to a BFF for a second opinion.
5. Find new ways to save customers’ time
There’s no denying that the retail industry is undergoing painful contractions, due in large part to the scramble toward omnichannel retailing. Large department stores have spent aggressively to build up their e-commerce sites, and many are doing too little, too late—and they can’t match Amazon’s prices anyway. (While it’s still early, Walmart may be the exception.)
But that doesn’t mean there aren’t plenty of ways to save people time and that retailers shouldn’t be trying to aggressively close the gap with Amazon. Besides trying to establish itself in the “order online, pick up in store” grocery space, Walmart is exploring ways to save and enhance time in stores, too. A deli kiosk lets customers select meats and cheeses, choose the quantity either by weight or number of slices and select the thickness preference of each slice. Customers then can continue shopping while deli staff fill the order and place it in a special cooler next to the kiosk where the customer can pick it up.
Will it work? Eventually, we think, it will. “We’ve always been about saving people money,” a Walmart exec recently told investors. “Now we’re about saving people time.”
It’s often said that Amazon is devouring the retail universe. While there is some truth to that statement, there are plenty of ways retailers – and other brands – can carve out a niche to stay relevant to consumers in the age of Amazon.