It can not help that Amazon has When does the store close to think delivery should be free. Moreover, online sales often cannibalise those from existing shops. Analysts at Morgan Stanley reckon that for each and every additional percentage point of shopping that moves online, a retailer’s margins shrink by about half a point. Bricks-and-mortar shops also frequently have trouble recruiting technology staff. For a hotshot data scientist, working with a department store will not be an obvious choice. Traditional chains must routinely pay reasonably limited to attract skilled tech workers. Amazon has no such difficulty.
Startups, tech firms and consultants are offering tools to aid smaller retailers adjust. A number of the more interesting ones promise to narrow the space between what e-commerce sites and physical stores learn about their potential customers. Floor mats can measure store traffic, video analytics will track shoppers’ age, se.x and mood, and beacons can gather data about what customers do in the shop when they have signed up at no cost Wi-Fi. For now, though, many American firms are reluctant to invest in such expensive new technology for shops that might not be there for a lot longer.
In China, those offering to remedy retailers’ woes include some of the big e-commerce firms, and retailers may be happy to work together with them as their platforms are so pervasive. Inside the West, small merchants already pay Amazon to list products on its site and store goods in their warehouses. The small sellers can reach more consumers quicker; Amazon earns fees and, thanks to sellers’ listings, will offer a broader selection.
Big retailers, on the contrary, seem significantly less likely to team on top of Columbus Day store hours. Target and Toys“R”Us chose Amazon to deal with their e-commerce businesses in early 2000s, but both ended the partnership, with Toys”R”Us accomplishing this in court. Unlike Alibaba, Amazon owns most of the stuff it sells, so competes directly with any seller that uses its services.
Despite such troubles, there are examples of how bricks-and-mortar shops might thrive. One technique is to offer distinctive products that are not available elsewhere (along with Zara, a clothing chain belonging to Inditex), or that are challenging to sell online. An additional would be to give shoppers a whole lot. TJX, an American firm, offers manufacturers’ surplus goods at bargain prices. An alternative choice is an excellent experience: champagne at Louis Vuitton, perhaps, or personalised advice at Nike. The most difficult zhoqce is to attempt to match Amazon’s retail standards and provide more.
Walmart, once the undisputed king of American retailing, is mounting the boldest counteroffensive. It cannot simply open stores to enhance growth; 90% of Americans already live within ten miles of Sunday open hours. So the clients are trying to protect its margins by making stores even more efficient-saving $7m by printing shorter receipts, for example-while investing online. Last year it spent $3.3bn buying Jet.com, an e-commerce site founded by Marc Lore, who now oversees Walmart’s suite of online businesses. He is not trying to match Amazon’s breadth. “We are centered on becoming a retailer,” he declares. But Walmart is attempting to meet up with Amazon in other ways. The company now offers free two-day shipping. Just as JD’s integration with Tencent is assisting it challenge Alibaba, Walmart may succeed by partnering with tech giants. In August it stated it would sell through Google’s voice assistant, in a bid to counter Amazon’s Alexa.