Retailers Need to Step Up in-Store Game — Amazon Is Gaining

Prime Now

Last week on the LSA blog I wrote that Amazon Prime (Now) was emerging as a true existential threat to local retail. In addition to its Prime Now app, the company has launched PrimeNow.com.

The cost for two-hour delivery (where Amazon delivers) is nothing. For one-hour delivery it’s $7.99. Tipping the driver is optional but recommended.

Prime Now is currently available in roughly 25 cities and only applies to a limited (but growing) range of products.

Prime Now

The immediacy of Prime Now will cause more Amazon Prime members to turn to Amazon in situations where they might have gone to a local retail store. Part of this is because the experience in many retail stores is frustrating. Among other things, customer service is often poor and finding products can sometimes be difficult, causing customers to abandon stores even those the desired item might have been there.

A personal case-in-point: the other evening I was at my local Rite-Aid. I was looking for a particular medicine for my daughter. There were no customer service people on the floor and no in-store tools to help me find what I was looking for, beyond conventional signage. After about 20 minutes of diligently searching the aisles I called up Amazon on my iPhone, found the product and ordered it for next-day delivery.

Multiple studies have indicated how poor customer service in stores harms the customer experience, costs sales and even negatively impacts the retail brand. For years many retailers have focused on price competition and relied on low-paid, poorly trained employees simply to work cash registers.

This approach will no longer work and services like Prime Now will erode local retail sales because of the superiority of the overall experience.

What retailers need to do is improve the quality of the in-store experience in a fairly dramatic way. They should invest in training and provide tools for in-store shoppers to 1) find what they’re looking for and 2) get the product information they need to help make purchase decisions.

A central part of this strategy involves mobile devices and indoor location (beacons, etc). But it also means taking a holistic approach to improving the customer experience. Except perhaps at places where price is the only thing that matters, failure to invest in the in-store experience, including better service, will only mean further gains for Amazon.

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Agencies, brands, retailers and marketers interested in hearing more about what’s working in proximity marketing, location analytics and in-store mobile experiences should attend The Place Conference, September 21 in Chicago.

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2 Responses to “Retailers Need to Step Up in-Store Game — Amazon Is Gaining”

  1. Chris McCreery says at

    How long until the suppliers simply start direct shipping to customers instead of stores or online merchants?

  2. Greg Sterling says at

    I agree . . . this is what both consumers and brands want — to cut out the middleman in many cases. But a good in-store/customer service experience can be invaluable in making purchase decisions. There are still many categories that benefit from stores and local dealers. Some things consumers want to see and feel but over time those categories will be fewer probably. The compressed delivery time is removing one of the arguments for local stores — “need it now.”

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