Tuesday, September 18, 2018

What Doesn’t Kill Me

Retailers learn hard lessons from competing with the Amazon model

Modern retailing has taken some strange turns in the Amazon era. For instance, you can now utilize the services of a “personal shopper” – at Walmart.

Malls are being hollowed out, shops are closing by the thousands, and retailers are going bankrupt. But it may be too early to declare the death of retail. Americans have resumed doing more shopping physically in “brick and mortar” stores.

From the garden section at Walmart to the diamond counters at Tiffany & Company, old-school retailers are experiencing some of their best sales growth in years. The Apple Store, of course, has consistently been in the forefront of improving the retail customer experience, and profitability.

The strong revenues start with a roaring economy and an optimistic consumer, and also reflect a broad reordering of the $3.5 trillion industry, with fewer retailers capturing more of the gains. Stores that have learned how to match the ease and instant gratification of e-commerce shopping are flourishing, while those that have failed to evolve are in bankruptcy or on the brink, reported the New York Times

Many successful stores are now a cross between a fast-food drive-through and a hotel concierge. Target’s shoppers can order sunscreen or a T-shirt on their phone, pull up to the parking lot and have the items brought to their car. Nordstrom lets customers in some stores make returns by dropping their items into a box and walking out — no human interaction required.

Walmart is employing 25,000 “personal shoppers” to select and package groceries for curbside pickup. In recent weeks, all three retailers reported stronger-than-expected sales growth for the quarter. Traffic to Target’s stores and online sites grew at its fastest pace since the company began keeping a record a decade ago.

The scramble to improve shoppers’ experience has major implications for how companies need to organize their supply chains to accommodate them. Customers can order online and pick up at the store. They can order online and have their purchases delivered home, in some cases, on the same day. If they return goods, they expect the process to be seamless and free.

Remember the old adage – “what doesn’t kill me makes me stronger.“ Are you ready to compete in the brave new shopping world?

Kirk Shearer
President & COO
(973) 726-2103
TOTALogistix, Inc.

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