Bad news for brick and mortar retail; Amazon is opening more stores
If you are in retail, we can help you build an effective Omnichannel strategy to compete with Amazon. Contact us.
Well folks, it has finally happened. Nearly every major department store in the USA and Canada, including Macy’s, Kohl’s, Walmart, and Sears, have closed or intend to close hundreds of stores.
This is due to more competition and lower profit margins and the continuing rise of ecommerce.
When an anchor store like Sears shuts down, it may also lead to a “downward spiral in performance” for shopping malls.
How Can Brick and Mortar Retailers React?
Many believe that there is no way to stop the retail decline, but there may be a few solutions for the big stores in the age of Omnichannel marketing:
- Diversify – the old retail model has failed to adjust to modern realities and the shopping habits of the modern consumer.
- Follow Amazon’s lead – they say if you can’t beat them join them. Most big retailers have great online stores but cannot compete with Amazon. It may be time for the big retailers to adopt the “Amazon model” in fulfillment, pricing and customer experience.
- Review what your customer’s needs and values are: Millennial and Gen Z consumers in general have vastly different needs to the older generation that viewed shopping in terms of visiting a store. They want products are ethically made, with fair salaries paid, environmentally friendly and authentic.
If you are looking to diversify, or need help with reviewing your business model, we have experts who can work with your company to help you survive the “Amazon onslaught.” Alternatively, we can also help you transform from a brick and motor business to an efficient and profitable pure play model.
Contact us to discuss.
Are you ready for the Amazon expansion? Recent reports suggest Amazon is planning to open 2000 brick and mortar stores starting in 2017. Analysts are now wondering if this could be the beginning of the end for the strictly Pureplay model or ecommerce companies need both a physical store and online portal to survive.
All About Profit
Amazon’s latest earnings report certainly show disappointing results. Net income was $252 million in the third quarter, or $0.52 per diluted share, compared with $79 million, or $0.17 per diluted share, in third quarter 2015.
This downward trend was mainly due to:
- High Shipping costs.
- Increased revenue from cloud services – an increase of 55%, $3.23 million.
- High fulfillment expenses – The company added 18 fulfillment centres in 2015.
- Investments in artificial intelligence, Alexa.
- Increased expansion in India.
The question to ask is what is the best strategy? Are you going to pursue a Pureplay model, the retail model, or a combination of both? Contact us and we will help you to research the best strategy for your business.
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