Competing with Amazon is futile, as the behemoth has no problem racing to the bottom to win market share, but there is a way to get out of its shadow.
Amazon is known as the “Everything Store” because it has a wide selection, and in an era of hyper-competitive retail, focus is the name of the game for retailers working to carve out and protect their niche. Adding millions of SKUs and amassing thousands of reviews are not that way to compete with Amazon.
Instead, retailers need to focus on creating a unique experience for customers to keep them coming back.
You don’t have to beat Amazon to thrive
Experiential retail has been discussed at length, and it boils down to identity retail. Retailers must ask themselves, “Who am I, how can I display this, and why should shoppers care?”
The only way to “beat Amazon” is by offering something that they can’t.
As Amazon rushes to open bookstores and grocery stores, retailers must lock down their raison d’etre. Only then can they strategize to create experiences that evoke emotion.
Success in retail is largely about emotional connection and retailers that want to win will hone their own version of this. This is more easily said than done for legacy retailers that are set in their ways. But smaller, nimbler retailers are leading the pack on this front.
Glossier, for example, has a permanent shop in New York City, but has also tried a pop-up in San Francisco. I visited it in April and can tell you that hosting a makeup pop-up in a fried chicken restaurant is an odd concept, but it is something I’ll never forget.
These moments of glee, inevitably linked to the brand and product, are the ones that retailers should be after.
Another example is Samsung’s 837 in Manhattan’s Meatpacking District. It hosts events, classes, product exploration, and lets customers try out innovative products – but doesn’t actually have any products for sale. While this might sound counterintuitive, Samsung is taking retail to an interactive plane. Potential customers will have a much better idea of how the products work and what they can gain from them if they can try them out first—and not just a short product demo, instead a full, immersive experience.
It comes down to customer experience
The future of retail is creating an experience that consumers can’t help but tell their friends and family about. And, luckily, it is also a key way to differentiate from Amazon.
Amazon has created a hard to beat online customer experience that keeps shoppers coming back, but in-store this experience has the potential to have much more impact. Experiential retail can be the answer to Amazon’s dominance, if done in an authentic way.
The entire concept of retail is changing. As stores reevaluate their store footprints and go with a quality over quantity strategy, experiential retail is a way to make the most out of the remaining square footage. Shoppers don’t want to be sold to in the new retail reality, they want something unique and experience they’ll never forget.
Retail winners roll with the punches, ask their customers what they want, and take the leap to experiment to pose a legitimate threat to Amazon. Successful retail in the modern era creates community, with the brand in the center of that experience. They create a connection and, as a result, create organic brand ambassadors.
Experience has been Amazon-proof since their rise to power, but their recent focus on physical stores shows that they understand their weaknesses.
Mixed use retail is not new, but the way retailers are carrying it out and their laser focus on it is. In a November 2017 report, “Future of Retail 2018,” PSFK surveyed 400 retail executives and 55% said that by 2020 part of their marketing budgets would be spent on in-store experiences.
The connection with the shopper must be put first to win in retail and that’s what experiential retailers are catching on to. There’s no telling what’s next in experiential retail, but my bet is that someone is already building it.