Amazon Prime Day Is Here And It’s A Wake-Up Call For Brick-And-Mortar Locations
Rather than try to beat Amazon on price, local businesses and major retailers need to concentrate on driving personalized experiences, says Swirl's Rob Murphy.
Amazon Prime Day is back for the second time and physical retailers have been girding themselves for the e-tail giant’s version of its own “Black Friday.”
To be sure, the deep discounts on what Amazon said was its highest single-sales day last year — 34.4 million items across Prime-eligible countries, breaking all Black Friday records with 398 items ordered per second — is enough to send a shudder through brick-and-mortar businesses trying to beat back showrooming and Amazon’s ability to target deals to customers so acutely.
But trying to beat Amazon on price-cutting will lead to nothing more than a race to the bottom, says Rob Murphy, VP of marketing at proximity platform Swirl Networks. Instead of an impossible, and possibly self-destructive, battle against Amazon on discounting, Murphy says retailers need to play to their strengths: namely, the ability to create a real showroom and shopping experience by offering more personalized services through apps and proximity signals.
For the most part, despite the attention Amazon Prime Day will generate (with articles touting “record-breaking sales” or posts like this one, which come at the “holiday” from a different angle) Murphy advises a little perspective when it comes to looking at the challenge to physical retail from Amazon Prime Day.
“It’s less about what’s different about Amazon Prime and retailers, and it’s more about how can physical businesses compete generally when it comes to online-and-offline commerce,” Murphy says.
“You can think about this as yet another opportunity for Amazon to flex it’s dominance and marketing muscles. They already have massive mindshare, they have this unbelievable e-commerce engine, they have tons and tons of data around consumers, and now they can offer prices that are lower than virtually anybody else,” he adds.
Stores’ Strongest Asset
The real question for retailers, Murphy says, is to look for leverage to create a different sort of experience or opportunity or advantage for them against Amazon.
“The strongest asset that they have is their physical stores. Retailers need to figure out what they can do to leverage those assets in a unique way that creates more value than Amazon can,” Murphy says. “Frankly, that’s where I think this whole opportunity around proximity marketing and mobile presence marketing comes in. It’s an opportunity for these traditional retailers to bring digital into their physical stores and create really engaging new experiences for their shoppers.”
Creating An Online/Offline Experience
As an example of what a successful omnichannel “experience” looks like, Murphy points to a Macy’s effort during Black Friday 2015.
Macy’s initiated an in-store scratch-and-win digital sweepstakes that used beacon-based marketing triggers. Consumers who had downloaded the Macy’s app were presented with a digital scratch card on their smartphone when they entered one of the brand’s stores.
“It was an opportunity for consumers to win shopping sprees and vacations and gift cards,” Murphy says. “It was a fun, different, engaging way to make that shopping trip even more exciting for those consumers.”
When compared with the shopping experience of Amazon, Murphy notes that it’s the rare consumer who goes to Amazon to be entertained and dazzled. For the most part, people are on Amazon to find a specific item efficiently and cheaply.
“If you think about what Amazon stands for, nobody loves shopping on Amazon,” Murphy says. “They buy stuff on Amazon and it’s an amazing transaction because it’s very quick and they have everything and it’s a great price, but it’s a transaction.”
Physical retailers, by virtue of having a physical store, have to have an experience — some better than others. A better experience involves enticing people with sights and moods, along with amenities like wayfinding and curbside pickup that have become hallmarks of omnichannel services.
“Those are all the opportunities that traditional retailers have to create something that Amazon just can’t do with an online only experience,” Murphy says.