Monday, December 12, 2016

Watching Your Dolllars (Walk Out the Door)

Specialty Retailers Shrug and Wait to See What Goes Down

Brick and mortar retailers remain under pressure from online retailers, of course, especially as Amazon continues to hone their game: products offered at little or no margin and an almost perfect delivery channel, your gift of instant gratification arriving the day after you hit the order button. Indeed, recent reporting on their Prime service also indicates that Amazon is willing to lose revenue on this service in order to establish that recurring and impulse related relationship with the customers. What amazes me most, though, is that so many brick and mortar stores – many that consumers still like and trust – let these dollars walk out their door in light of this challenge from Amazon, conceding the opportunity for a repeat order or the chance to establish a longer-term relationship that might yield additional revenue.

In 2015 Radio Shack closed almost 1800 stores. Think about that for a second. A store and brand and signage that had economically and visually anchored strip malls in communities across the country, sunk. The demise of these stores, no doubt, was a confluence of events – they certainly weren’t helped by the recession, for example – but also an opportunity for other brick and mortar stores to do an honest assessment of their own customer relationships in a retail landscape being rapidly redefined by perfect experience after perfect experience at Amazon. Why bother to stop by a Radio Shack? They couldn’t answer that simple question. More pointedly, why hadn't management called for the obvious: a simple, dedicated initiative to bring consumers across to I’ve bought a thing or two at RadioShack in the past but, like you, can’t say I ever received a single email communication from them asking or incentivizing another order. What planet where these guys livin’ on? This was 2015, not 2005.

Over the next few years, Amazon's investment in an array of distribution centers dotted across the country – just check the local news or ask your favorite commercial real estate agent – are sure to make brick and mortar a terrible challenge for those retailers who just shrug and wait to see what happens rather than making simple technology enhancements to engage the omni-channel expectations of consumers. They’ll shoulder the burden of rent, real estate, taxes, and staffing headaches while trying to entice modest foot traffic that may never arrive. They'll learn the lessons of Radio Shack as consumers walk away, just like Amazon was hoping.

– Jon Roketenetz

Jon is the CEO of GimmeAnother and founder of 3VERB.