Contrary to the doom and gloom surrounding the future of brick-and-mortar stores, they may have an advantage that Amazon can't compete with.
Is it possible that the delivery race is giving brick-and-mortar stores a boost?
Despite all the doom and gloom surrounding the future of traditional shopping outlets as giants like Amazon and eBay sink knee-deep into their same-day delivery experiments, some analysts say their demise may not be inevitable after all.
For a store retailer struggling to lure customers from a steam-roller like Amazon, which earned its nickname, “Suicide Bomber of Retail,” for a reason, any mention of a potential boost is likely to come as a surprise.
Amazon has not exactly decided to lessen its stranglehold on the brick-and-mortar stores, testing its own delivery-service to improve control over shipments and launching Prime Pantry, which allows Prime members to shop up to 45 pounds of household essentials and have them delivered for a flat fee of $5.99.
Add the fact that Amazon and its like have publicly announced the bottom line is no obstacle to the same-day delivery quest, and the construction of distribution centers across the country is picking up speed, and the dire predictions seem on target.
But Steve Banker, service director of supply chain management with ARC Advisory Group, makes some interesting points in a recent interview. According to Banker, Amazon simply cannot build enough distribution centers, leaving an opening for those brick-and-mortar stores that have multiple locations. In essence, they are distribution centers themselves, located in close proximity to their customers. The question is whether they can capitalize on this advantage?
Perhaps the answer lies with companies like Zipments, which pledges to help large retailers, e-commerce, and local brick-and-mortar stores stay competitive by enabling them to offer same-day delivery. The New York City-based company serves 1,000 clients across the country; one is a comic store franchise, which delivers new comics to customers the same day they are issued. Zipment clients place their pickup requests through the company's mobile app, API, or website. Real-time updates then track the pickup and delivery times.
Whichever system retailers choose for home delivery, it is essential that they acquire the skills of a supply chain company. And to truly drive home the advantage of customer proximity, another analyst, Anand Medepalli of JDA Software, rightly argues retailers need to redefine the store concept. He said:
- Stores should offer free Wi-Fi not only to provide shoppers the ability to self-shop, compare, and be socially connected, but also to have the ability to know which customers are in store and target offers at them. Most importantly, the store must have up to date information on assortments, inventory, and pricing at all times, taking into account recent orders and returns to maximize their selling opportunity.
To underscore there is hope for the non-Amazons, a recent Accenture study found a growing number of customers actually opt to make their purchases at a regular store.
What do you think is key for brick-and-mortar retailers to stay competitive? Do they have a fighting chance?