Welcome to Part 2 of our series Beating Amazon: How the Independent Retailer Can Overcome Retail’s E-Commerce Giant

In case you missed it, you can read Part 1 of the series here.

So we’ve established the first possible chink in Amazon’s seemingly impenetrable armor… the face of the company is built around a website. This works great for the person who loves to shop online, but the reality is that that vast majority of transactions still take place offline.

Retail Sales: Offline and Online

According to this report published by the US Department of Commerce on August 16, 2016, E-Commerce sales accounted for only 8.1% of total retail sales in the second quarter of this year. What does that really mean?

• E-Commerce is still growing. No doubt about it.
  • E-Commerce sales grew by 15.8% while retail sales overall grew by 2.3%. Online sales are growing at a much faster pace than the rest of the retail sector.
• That being said, offline transactions still account for 91.9% of all retail transactions in the US.

I personally think that Amazon is going to continue to grow and expand into more markets in the next few years. But even they realize the limitations of being strictly an online-based business. They launched a physical bookstore in University Village in Seattle last year and have plans to open up more in the near future in other cities across the US.

This all reinforces my second point in this article, which is:

Amazon is built on a specific business model – E-Commerce.

No one can deny that they’ve made a killing doing E-Commerce. It’s probably not a stretch to say that they’re the best in the world at it. But the fact remains that people still do the vast majority of their retail purchasing offline.

What Amazon did, in large part, was to overpower a lot of the companies that were not well-prepared for the online markets. A lot of people, especially young people, are browsing online before going to a physical store and purchasing the item(s) there.

So how can Amazon’s incredible web presence actually help you?

Retail locations succeed when they have a competitive advantage. Maybe that’s your shipping policy, or your exclusive brands, or your prime location. What Amazon did was make research and discovery easier. People know a lot of facts about the physical things they are interested in, but that doesn’t get them everything they need as a consumer. That’s why the retail stores who have an incredible staff with world-class customer service training will ultimately stand out. Customer service is increasingly becoming the competitive advantage that’s convincing consumers to buy offline, even when they could buy from someone else for a few cents cheaper online.

Amazon helps people find what they need… you can help people experience what they want.

An experienced salesperson or clerk can give a potential customer a nuanced and pleasant experience in your store. They can take the facts (sizes, colors, warranties, etc) and turn them into a story that connects with each individual customer that comes into your store. That takes skill and finesse, but it’s totally worth it to the majority of people, as evidenced by the Dept. of Commerce stats I cited earlier.

This can be especially true for shoppers who are in higher income brackets… the better you can make the shopping experience in your store (i.e remove the hassles, have a great theme throughout your store, provide people places to relax and enjoy their time in your store) the more loyal your customer base will become.

In our next installment we’ll look at an example of a high end store that is modeling this exceptionally well, and we’ll get practical on how you can take this idea of “giving your shoppers an experience that they enjoy” and really fine tune some of these elements in your location.

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