And I’m sure you’ve heard about Toys R Us closing all its stores. Even the biggest of dogs, like Walgreens and Walmart are shutting down considerable numbers of stores.
At first, this sounds frightening. If giants fall, doesn’t it seem like anyone could be taken down by Amazon?
But one article at Forbes claims this problem could have been avoided.
Because retailers haven’t adapted to meet consumer needs.
Large retail stores were born out of the necessity that consumers had a lack of access. With no other options, the market worked such that consumers had to go to large retail stores to find exactly what they wanted.
…And that means prices and margins remained high too.
But, The Market’s Changed
Today, Millennials and Generation Z want locally sourced products, made by workers treated ethically everywhere in the supply chain, which are also environmentally friendly, and provide a unique experience.
Yes, that’s harder to do.
But retailers can do it (as shown by Amazon).
The main problem, the article argues, is that traditional retailers have a completely opposite culture from technology companies. Amazon does not think of itself as a retailer, but as a tech company who happens to be in retail.
Tech companies, for example, buildbig and fast and learn as they go. They’re unafraid to make mistakes and quickly adapt to market demand and changes.
Traditional retailers, however, want to avoid mistakes. They can’t adapt to market changes fast. And they want to rely on their traditional approach that they know what works best.
We’re not saying either approach is better.
…But are you starting to understand why even large retailers find themselves struggling versus Amazon?
If you can’t rapidly react to market changes, while another company is built to do just that, there’s a massive competitive advantage you can’t beat.
So, What Do You Do?
Walmart bought a weapon: Jet.com. They believe that by creating an emotional connection online (discovered through extensive testing), and by targeting a market segment that does not typically buy from Walmart (urban Millennials), they can somehow compete with Amazon.
You may not be able to create a multi-billion dollar operation like Jet.com. But, you can certainly work on integrating your online and offline shopping experiences to meet the needs of new market segments.
Companies who take risks will adapt and thrive. And hopefully you can find ways to do so going forward.