Amazon v. Walmart: The Retail Thunder Dome

I don’t know about you, but as we head into the prime shopping season of the year, I plan to do a good deal of my gift shopping online. I also plan to do a lot of it offline, but isn’t that the way we all shop these days—a healthy mix of both? I am checking my email and store websites for deals, but depending on the item and price range, I may want to go into the store to actually see the products and ask questions. There’s just something irreplaceable about being able to hold something in my hand. And vice versa. Sometimes I see an item in a store that I love, but I want to check online to see if I can get it for a better price elsewhere.

This multi-channel shopping trend is becoming more and more recognized by major retailers. Traditional offline retailers like Walmart are spending significant dollars trying to figure out how to compete online. And traditional online retailers like Amazon are going offline by building brick-and-mortar locations. The big boys are putting on the boxing gloves with intentions of duking it out to try to give shoppers exactly what they want and I suspect the battle is about to get ugly. (Read more about the ongoing holiday competition: Huffington Post: Walmart vs. Amazon.)

Amazon
(Source: Forbes)

And it’s not just your major retailers that are responding to multi-channel shopping behavior. I even saw a recent article where my favorite grocery store, HEB, a true Texas favorite, is going online. The grocery store is going online, people! And I, for one, couldn’t be more thrilled. This will allow my daughter, who recently moved out of state, to get her favorite HEB brand goodies without leaving her apartment, a thousand miles away from the nearest HEB location. This saves me from running to the grocery store to buy HEB brand coffee to ship to her once a month.

HEB-home-page
(Source: DallasNews.com)

While it may seem obvious why traditional offline retailers like HEB or Target, Best Buy, Macy’s and Home Depot are creating an online presence, Amazon’s brick-and-mortar store is clear proof that there is a trend in the other direction, as well. Many popular online retailers, like Bonobos, Birchbox, Warby Parker, TOMS, and Rent the Runway, who built their businesses as digital entities, are all making moves offline.

July_StoreAnnouncement_01_700x400
(Source: Birchbox)

So the question begs to be asked…why? Why are all these companies as well as retail giants like Amazon and Walmart putting such a focus on something that is not their core strength? Why are they spending significant time and money trying to make the multi-channel, or omni-channel, model work for them? Is it really that they just want to rule the world? Perhaps the answer is something far less sinister. It’s simply because consumers are demanding it. And if you snooze, you lose.

Companies are starting to respond to the fact that their customers don’t have just one buying style—they have multiple, and depending on the time of year or type of product, their interaction with the retailer may change to suit their needs. A company like HEB has learned that to compete with Walmart and Amazon, they need to allow consumers to have the experiences they want to have, not just the ones the store is willing to provide. And while online sales may never compare to in-store sales for HEB and Walmart, the fact that they are forward-thinking and responding to the desires of their customers wins them points—and that equates to customer loyalty, and what we at Boundless call “Brand Love.”

The shift from online to offline is certainly the more surprising of the two—why would a company like Amazon, built on the principals of the online experience, tailoring to the digital consumer, creator of e-readers, challenger of the traditional book store, open a store? What these retail giants are beginning to understand is that consumers not only want more options, they want ALL the options. A Blackhawk Network consumer survey conducted in September of 2015 concluded that 84% of shoppers will visit a brick-and-mortar location to purchase gifts this holiday season while 78% will shop online. I’m no mathematician, but even I can see there is overlap.

StoreStats2
(Source: MarketingProfs)

It turns out, people—millennials in particular—actually enjoy in-person, tangible experiences. And surprising as it may seem, research commissioned by Publishing Technology shows that 79% of millennials in the U.S. read a print copy of a book in the past year, which is nearly double than the amount that chose to utilize an e-book. Bad news for Amazon’s Kindle. Good argument for having a store (Source: Forbes). With these kinds of numbers, it’s easy to see why the big players are trying to cover all their bases in anticipation of the holidays. Whether offline or online, the key is creating a great customer experience—and increasingly, in both spaces.

So what does this mean to the B2B world? In business, we all know that the relationships we build with our clients are often just as important as the products or services we sell. After all, in many cases, you can buy your [insert product or service here] from any provider, and what sets you apart is the hands-on touch you bring to the table. Maybe this is what B2C has to learn from B2B, and perhaps it’s one of the reasons all those online retailers are moving toward adding a physical location component to their sales strategies.

At Boundless, we’ve spent many years thinking about our buyer’s experiences and the relationships we develop. Ten full years, in fact! In that time, it’s become clear that giving buyers what they want, when they want it, online, offline, and both, is very important. Notice I did not say, OR both, I said AND both. This is where the most important factor comes in—the relationships we build. It’s all in the AND, folks. Online, offline, AND personal attentiveness from someone you know—a consistent relationship manager that will take care of the customer both online and off.

So while the big boys battle it out in the retail thunder dome, we’re happy to cheer them on from the sidelines. Maybe we’ll be able to learn something from their successes and failures that we can adopt in the business world. While they’re duking it out, we’ll continue to listen, learn, assist, and develop relationships as well as new technologies to support our clients in the ways they want. So stay tuned. We’re excited to watch the main event while we continue to cultivate relationships with our clients and work together to determine what comes next!

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4 responses to “Amazon v. Walmart: The Retail Thunder Dome”

  1. Excellent and very informative blog. I did know about HEB’s venture into online stores but did not know of major online sites imitating them with the traditional hands-on shopping experience. This will make a lot of people happy this holiday season.

  2. Excellent blog. I was thrilled to hear about HEB going online. Live in the Ft. Worth area and totally miss HEB. Excited about ordering online.

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