by Michael Dattoma
A nemesis can bring out the best in us and push us to reach greater heights. For specialty retailers, that nemesis is Jeff Bezos and Amazon. So what are you going to do about it?
The United States had the Cold War with Russia, during which they were the Evil Empire and we had Ronald Reagan. The Boston Celtics had the Los Angeles Lakers; Coca-Cola will always have Pepsi; and the Yankees have the Red Sox. In fact, we have all had someone in our lives that may have hurt us, abused us, took advantage of us, beat us, crushed us or stolen from us. But the wonderful thing about the human species is that we grow and accomplish the most when we are challenged, tested, and pushed to the brink with our backs against the wall to what we think are our limits.
In the absence of such an adversary, we can get soft and rest on our laurels and lose our edge. Think about how much losing that girl or that guy, losing that job, or getting cut from that team motivated you to fight harder, get better, be more, overcome the shame and the humiliation, and yes, get even. These are moments in our life that are burned into our memory and help us to adapt and survive. Without that survival instinct and that adaptability, we would have never made it from cave dwellers
This is the kind of attitude that specialty retailers need to bring to the biggest battle of their lives. It’s a battle for survival, a war against a menacing force that wants to steal your livelihood, take away everything you have worked for in your life. If it’s a family business, he wants to steal what your father, grandfather or great-grandfather built. He wants to make our Main Streets soulless, vacant landscapes that were once occupied by a mosaic of amazing independent shops that made communities special.
Let’s be honest: Jeff Bezos does not care about you, your business, your town or your city. He wants one thing and one thing only: to take your customers and lay waste to businesses that have served communities since the beginning of time. How is he doing this? By making humans lazier and lazier. He has developed the logistics and distribution to keep us sitting on our asses instead of walking over to our friendly neighborhood merchants.
Is this good for society? I certainly don’t think so. Anything that causes us to isolate from each other as people, that stops us from leaving our homes and going to our local malls and streets to engage in that dance of humanity does not serve us well as people. It just makes us fat, lazy and alone. I admit, I use Amazon Prime as well, but I want to not use them. I love going to stores and for stores to win they cannot be disappointing experiences once we get there. Sadly, they often are and that needs to end, and end fast.
So this is time for specialty retailers to unite in their ideas, in their passion, and in their desire to fight this menace — and to fight for what is just and right and important for society. I don’t want to live in a world where there is no longer a diversity of thriving specialty retailers. Maybe Jeff Bezos is motivated to put all retailers out of business from a massive insecurity complex (like The Revenge of the Nerds” on steroids.) His ambition is becoming a bore to me because it creates nothing but convenience on the backs of everyone else.
I am so proud of brands like Birkenstock who have fought back and not allowed Amazon to carry its products, but I cringe when I see Nike make the recent decision to go all in with Amazon. As successful as Bezos is, and despite being the richest man in the world, I believe he has done it by taking from others in a zero sum game. He has not created any accretive value to society but simply sucked it away from other retailers. This is why if Amazon did not have its cloud services, a part of their business I truly respect, they would be bleeding with losses. I think of people that added value to the world, like Bill Gates, Steve Jobs and Elon Musk, and consider how they will leave their imprint on society. But I see none of this with Bezos. He is just robbing Peter to pay Paul; he’s a giant middle man that the government has allowed to grow into an unchecked monster, and who now wants to be kingmaker of every industry in his sights. Amazon is a vampire squid looking to suck the blood out of Main Street USA.
So this is where we are, which means it is time to mobilize and fight for the survival of not just your brick-and-mortar store, but for our society itself. The retailers that have gone out of business over the past few years due to the “Amazon Effect” refused to adapt or just did not know what hit them. They got caught up in a competitive tsunami. But now there are no more excuses, no more complaining or rolling over or throwing up your hands. It is time to punch back in the mouth, to dig deep and muster the courage to bring the best out of yourself, your staff and your business. As Dylan Thomas wrote “Do not go gentle into that good night. Rage, rage against the dying of the light.” Feel the rage and fight and mobilize like the U.S. did after Pearl Harbor. We must awaken that “Sleeping Giant” that is U.S. specialty retail.
It is time for action. Mobilize on your street, your town, business districts. Reach out to your local politicians. Take all the action necessary to reinvigorate your community and create the atmosphere that will draw customers back into your stores. Reach out to the NRF and collaborate with your local BID (Business Improvement Districts) and find ways to stimulate and create engaging experiences that can combat the laziness that Amazon Prime has fostered. Make the effort to push back on the soul-sucking, mind-numbing experience of living by Amazon Prime and not experiencing the community of merchants in your hometown. In order to do that you must deliver value, both on an emotional level and service level, to the customer. They have to buy into this vision — that the experience you offer and that getting off the couch and coming into the store is going to be a far more enjoyable, satisfying human experience than logging onto a computer.
I am hoping we get some help in this fight by the Whole Foods/Amazon merger getting blocked due to the clear anti-competitive forces at play. I also am keeping my fingers crossed that President Trump goes after Bezos (who also owns “The Washington Post,” which Trump sees as the king of fake news). Trump has said for a long time that Amazon has serious tax and anti-trust issues. But we cannot depend on him.
Instead, we must start locally. As Nick Saban, the legendary head coach of University of Alabama, says: “You have to start where your feet are.” That means you need to take action from where you are right now, not when conditions change or seem more favorable. As a retailer, you can get involved in the activism I mentioned above, but where you really need to get to work is with your own retail business. You need to train like Rocky Balboa did after he got destroyed by Clubber Lang in “Rocky III”; you need to get to the retail gym and remember the “Eye of the Tiger.” That is what we all need to get right now. So hang a picture of Jeff Bezos in your office to remind you who is trying to take away what you’ve got. Screw him! Don’t let it happen and invest in yourself and your business like never before. Like they say in “The Godfather,” it’s time to “Go to the mattresses.” After all, this is all about the family, the specialty retail family.
To get your store in shape to fight this battle, you must eliminate all channel conflict between stores and web. Call it whatever you want, omni-channel, unified commerce, universal customer. Forget the semantics, you just need to get it done. Rip out that legacy system that is creating silos of data within your organization and get your business wrapped around your customer, like Amazon does. The difference is you own a store and can “out-Amazon” Amazon when you properly leverage technology. You may not have Amazon Prime, but you can have customers buy online and return to store, buy online and pick up at store (for free!), or buy online and ship from store for less expensive fulfillment. You can craft your own spin on Amazon Prime but add a heart and a soul and human contact to the mix. That is a powerful combination that Bezos can never match. He cannot steal that from you, nor can he take away a sincere, authentic relationship from you as long as you deliver a great service experience.
My career is devoted to helping the independent specialty retailer not just survive, but thrive. We are all in this together. So rise up and fight for the hearts and minds of the American consumer by appealing to what they value: human connection, emotion and feeling loved and important. There is no way in hell Amazon is ever going to do that. Their weapon is laziness; they want to appeal to the Twinkie-eating couch potato masses and keep them in a mindless consumer slumber (coupled with an Amazon movie). We must raise the playing field and appeal to better human instincts.
I will leave you with that incredible sentence that Adrian said to Rocky from her hospital bed in “Rocky III” before his second fight with Apollo Creed. “There is one thing I want you to do for me.” “What?” replied Rocky, “WIN…WIN” says Adrian. So let’s go out there and WIN and beat that soul-sucking Vampire Squid.
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by Michael Dattoma
It has certainly been a tough year for brick-and-mortar retailers with the amount of store closures in 2017, outpacing the closure that took place after the 2008 financial crisis. Many attribute this to the “Amazon affect”, and the fact that we are all becoming consumers who cannot resist the convenience of an item arriving to our home in two days or less. Although this explanation certainly has merit, the truth is that the lion share of retail sales still occur in brick-and-mortar retail stores, and there are plenty of success stories in brick-and-mortar retail that offer the consumer a value proposition, a human engagement and experience, that can never be replicated online.
We are also a nation that has been overbuilt with retail compared to other countries and there is a needed recalibration for retailers who have stores that are not profitable. There is a need to clean house and allow for a reset of the retail landscape. Getting the store count to the right number, building the e-commerce channel, and implementing strong integration between brick-and-mortar and online will allow the U.S. retail market to stage a comeback, stronger and more efficient than ever. It is an industry that was badly in need of a shakeup, and with a competitor like Amazon you have no choice but to get better fast, or perish.
We are already seeing retailers such as Walmart, Best Buy and Target who are working diligently to transform themselves with the growing threat of Amazon biting at their heels. They have a huge amount of catch up to play online where their revenues are a drop in the ocean compared to Amazon, but their brick-and-mortar platform when tightly integrated to the online experience, can be a massive asset once they get both humming. Not every retailer is going to survive this fight, especially those selling general merchandise, but the ones that dedicate efforts toward greater efficiency, deeper engagement across channels and offer an experience that transcends the purely online competition, there is a strong opportunity for them to thrive.
Another silver lining for brick-and-mortar retailers is that the millennial consumer likes to buy experiences, not just products, they want to engage. In-store experience and customer service matter and that is a huge differentiator. While millennials do shop online and use social media constantly, 85 percent of them use mobile devices for shopping, but not buying. These consumers want to research online but still come into stores to purchase. To back up this point, April’s retail sales saw 91.4 percent come from in-store purchases, while 8.6 percent came from online. Now the pace of e-commerce growth has been double digit while brick-and-mortar has been anemic but that is also due to all the store closures and retooling that is being done. We are in a transformative period where I believe the true omni-channel retailer, one that engages their clients beautifully across the physical world and the virtual world will win this game.
So yes, there has been a lot of doom and gloom in the retail sector, but brick-and-mortar stores are not going anywhere anytime soon. Smart retailers can use this painful transition to reinvent themselves in order to cement their position in the retail landscape.
So, as the legendary band “The Kinks” once sang, “Give the people what they want.”
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by Michael Dattoma
It’s time for specialty retailers to take their power back in 2017
The 2017 NRF show was a very interesting experience. It must be somewhat overwhelming for retailers to enter that technology cauldron and come away with actionable items to address the needs of their business in terms of cost reduction and revenue growth via technology. There are so many retail buzzwords to contend with as well. First it was multi-channel, then omni-channel and now concepts such as unified commerce and universal customer. What is a retailer supposed to do to digest this plethora of concepts, what is the hierarchy of their importance, the ROI?
The takeaway for me at this year’s show was that the mantra seemed very consistent throughout the Javits Center. The idea of delivering a frictionless customer experience across all channels is no longer a “would like to have” but clearly a “must have” if traditional bricks and mortar retailers are going to, not just survive, but thrive in this new retail order. There is truly a retail revolution happening and there will be winners and losers.
I love specialty retail, especially independents, and it kills me to see the store closures and press headlines about the “Amazon effect” and bricks and mortar misery.
If the NRF Show in NYC had one theme this year it was, “if you want to be relevant as a retailer in this Amazon Age, you better embrace the new retail reality, embrace the concept of unified commerce, the universal customer, and get closer to your customers like never before.” It was a rallying cry for both relevancy and survival. We are all reading the headlines of retailers closing stores by the hundreds. It is time for retailers to take their power back, to fight.
It is time to mobilize, get smarter, and to engage customers at another level that surpasses the purely online experience. Technology is not the only answer. It must be coupled with great experiences for your customers. Great technology simply gives you the conduit to deliver an exceptional and memorable customer experience.
Coming out of NRF this year I am an optimist. I believe that brick and mortar retail is not going anywhere, but the rules have clearly changed. There is no time for complacency or paralysis, it is time for action towards delivering the frictionless customer experience, and invigorating your merchandising, across your channels. Customers expect it.
Let me offer you a starting point, a checklist for 2017 of the “must haves” coming out of NRF show.
Do you treat your inventory record as a universal asset shared across all channels? Does that visibility exist, in real time?
Do you treat your customer record as a universal asset shares across all channels? Does that visibility exist, in real time?
Does your e-commerce and brick and mortar stores have complete visibility to each other in terms of order management? Can your customers buy on web/return to store, buy on web/pick up at store, buy on web/ship from store?
Can you customers share gift card and loyalty points across channels, seamlessly?
Can your staff engage on the sales floor with mobile devices that allow them total visibility to your inventory and customer history to best deliver a memorable, frictionless experience?
If you haven’t taken that first step to delivering these capabilities, the time is now. The world is not standing still and each and every day Amazon is looking for ways to deepen their influence and get deeper into your customer’s mind and wallet.
It is time to rise up and take your power back. Your customers will be thrilled.
If you would like to discuss omni-channel, unified commerce, and mobile you can reach Michael Dattoma at Michael@retailmerchantservices.com.
by Michael Dattoma
You have your e-commerce site fulfilling orders from your warehouse and now you want to expand into offering fulfillment from your stores. But unfortunately, you have retail technology at your store that doesn’t speak with your website (you have different inventory programs for your store and website). So, you try to fulfill orders manually through Excel spreadsheets or other methodology that shares inventory data between your store and website.
You manage to pull it off for a while, and even though it is not perfect, you figure you can manage it. This might be a valid approach if you planned on a consistently low level of order fulfillment from the web, but if you’re looking to grow order fulfillment from your store, along with offering in-store pick up from online orders, then you need to reconsider your omni-channel strategy.
If you find yourself in this position and you are racing against your customer’s expectations at 100 mph, then it’s time to build a strategy from the ground up that will allow you to deliver omni-channel fulfillment in the DNA of your operations. You want to have 100 percent visibility of your inventory and customers across all channels in real time. Once you have that, your customers can order on the web and you can easily fulfill from the warehouse or the stores, your customers can pick up items at the store ordered on-line, as well as return items purchased on the web in-store with ease.
So don’t play omni-channel chicken with your customers, let them see that your business is prepared for the expectations of today’s modern consumer. That will keep them coming back, again and again.
If you are interested in hearing more about developing a strategy for omni-channel solutions, you can reach out to Michael at Michael@retailmerchantservices.com.
Note: MR-Mag.com collects promotional fees from site experts.
by Michael Dattoma
Don’t let the “Amazon effect” roll over your retail stores. Learn from them and play to win!
You hear it all over the media that mall traffic is down, that same store retail sales are in decline and that many retail stores are being shuttered as a result. While retail sales soften, e-commerce growth continues at a double digit pace annually. The Amazon effect is being touted as the reason so many retailers are struggling today, and although there is much truth to it, the death of brick-and-mortar stores is simply NOT going to happen.
Nothing so clearly emphasizes that point than Amazon making a big push into retail, announcing a planned roll-out of over 400 stores after their successful debut in Seattle in 2015. So with all the advantages as an e-commerce powerhouse, with all the benefits of the scale, and cost efficiency that they have enjoyed, why would they want to open stores? Why take on the cost of real estate, staffing and all the other operational expenses that bricks and mortar entails?
Amazon is opening stores because they understand that person-to-person customer engagement is critical, something that you as a retailer have always known. Shopping is a social experience and Amazon wants to engage with their tribe face to face, but it goes deeper than that, much deeper. Amazon knows so much about their customers from their mastery of online analytics on customer purchase history, recommendations that they want to deepen that customer knowledge and engagement in the brick-and-mortar world.
Amazon wants you in their stores, with your Amazon App on your phone, scanning barcodes, reading reviews, checking prices all in an effort to get an even deeper understanding of your wants, desires and needs. They can see at what price level you take action and purchase, and when you do not. You may be in their store to purchase an item that they don’t have in stock, but no worries, that lawn mower can be shipped to you in 2 days with free shipping because you are an Amazon Prime customer. By engaging you at the store, yet having the backend online engine and analytics heft, Amazon can truly be the “everything store” to their customers.
So we know from this Amazon move to brick-and-mortar, the importance of the in-store experience, but what can specialty retailers learn from this jump from “clicks to bricks”? What actions can be taken to align with the forces taking shape in retail due to Amazon?
With Amazon entering brick-and-mortar to deepen engagement with their clients, you in turn, need to make the investments to better engage your clients across all channels as well.
Here are a few ideas on how to infuse Amazon’s heft into your retail operations:
#1: You must deliver a seamless online and in-store experience to your customers. Like Amazon, you need to be capturing all relevant data on your customers across channels so you can best service them with a consistent brand experience, the so called “unified commerce” experience.
#2: You must have the retail technology in place to deliver a true omni-channel experience where your clients can buy online and pick up at the store, buy online and return to the store, buy online and have the item shipped from the store, the ability to redeem gift cards and loyalty points between store and web. These capabilities are outside the scope of many older legacy retail systems.
#3: You need to make the retail experience in your store just that, an “experience”: One that cannot be easily replicated by Amazon or anyone else.
#4: You must leverage your stores as fulfillment centers to counter that fast and free delivery option available to customers via Amazon. Offer free in-store pickup, offer free delivery over a certain order size, or for VIP customers.
#5: Re-energize your loyalty program and take a cue from Amazon Prime and how they have used this program to deepen the loyalty of Amazon shoppers through irresistible perks. Of course you cannot mirror this program, but what can you do to deeply engage your clients to keep coming back.
The “Amazon effect” will force retailers to get better, to work smarter, to become more efficient and to engage customers at a deeper level. It is time for retailers to play to WIN, and use this competitive threat as the catalyst to make them take the necessary actions to not just survive, but thrive with their customers.
If you would like to learn more about the technologies that specialty retailers are using to deliver this “unified commerce” and omni-channel experience, you can reach Michael Dattoma at Michael@retailmerchantservices.com
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