Walmart’s acquisition of Bonobos, announced on the heels of Amazon’s Whole Foods purchase, has consumers and retailers reeling. Will Walmart tarnish the Bonobos brand? How do the vastly different corporate cultures of the aligning brands reconcile to accommodate their targets?
While the answers are uncertain, one thing’s for sure. The competition between the physical and e-commerce behemoths, Walmart and Amazon, points to the necessity of having a strong digital and physical presence in the future of retail.
Of course, Walmart’s most recent acquisition isn’t the first in a line of physical retailers vying to stay competitive online. The list is long and getting longer, beginning with Walmart’s acquisition of Jet.com last year and more recently including Petsmart’s acquisition of Chewy.com.
But when you’re a small brick-and-mortar business without a billion-dollar budget for acquiring online companies, how do you stay competitive? The simple answer: knowledge is power. Being aware of the potential opportunities, threats and trends, and knowing how and when to act is vital for physical retailers’ survival.
“To thrive in the next decade, organizations must aggressively pursue innovation and be willing to disrupt themselves,” stresses Chris Donnelly, Senior Managing Director of global retail lead, Accenture Strategy. “The winners will be those organizations that prioritize adopting a partnership mindset to offer customers new value, innovatively meet consumer demand for new services, and implement advanced data sciences to derive deeper customer insight and enable better decision-making.”
Essentially, this comes down to using data to expand an online footprint. According to research by Gartner, more than 75 percent of companies are investing, or planning to invest, in big data in the near future. So, if you haven’t read up on the benefits of artificial intelligence or predictive analytics for your business, it’s about time you did.
Once exclusively the domain of the retail heavyweights, smart data is becoming more and more accessible, allowing physical retailers to garner relevant insights about their clients and move into their online space. “There’s a host of ways that someone can use data to craft a strategy or tactics,” explains Samir Bhavnani, Area Vice President at 1010data.
From strategic partnerships to knowing which products to list, according to Bhavnani, here’s what data can teach retailers about staying competitive online and off.
Understand What’s Happening Outside Of Your Walls
One of the most important ways for physical retailers to remain competitive is by understanding the trends that are taking place outside of their walls. “You have access to more data than you know what to do with inside of your walls. What most people don’t know is what’s happening outside,” Bhavnani remarks.
For example, where else are your consumers shopping, and how often are they making purchases? What types of products are they looking at and what are they taking home? This information gives retailers an opportunity to make a number of informed decisions.
When you understand market trends and consumer preferences, where people are searching, and the prices and products they’re looking at, you can use that information to craft offers specific to them. So, find out what your competitors stock, know what the trends are in online shopping, and put the available data to good use.
Align With Online Brands Who Are Reaching Your Target
You may not have the budget of Walmart or Amazon, but you don’t need millions of dollars to tap into strategic partnerships. By aligning with e-commerce sites that are successful at targeting your demographic, you can expand your digital reach in a way that is mutually beneficial. That is, partnerships can be equally effective for online e-tailers needing to establish a physical presence and physical retailers aiming to expand their online footprint.
Take eLuxurySupply.com, for example. Listed as Inc’s fourth fastest growing company in America, this direct-to-consumer online retailer has now established a wholesale business, selling home products like luxury sheets and towels in hotel chains like Marriott.
“Fundamentally, it is all about meeting the customer where they are and delivering real value,” confirms eLuxurySupply’s founder, Paul Saunders. “Through our online and physical channels, we are able to reach a global audience with our American manufactured products, making our addressable market much larger.”
Merchandise According To Data
When you understand what’s going on outside of your walls, you can decide what products to include in your stores. When you apply smart data to find out where customers are shopping and what happens when they leave your store without making a purchase, you’ll know what you need to include in your inventory.
“A company like Target saw outside of their walls that people are going to bed-in-a-box companies and buying mattresses online. They used that data to forge a partnership with Casper.” This allows Target to merchandise according to data and stock the mattresses their consumers want. It also allows Casper to get their brand in front of more people and to be available to consumers that want to experience the brand in person.
List Your Products On Established Online Platforms
Don’t be afraid to list your products on platforms doing a better job selling to your target online. What you’ll achieve is another avenue through which to reach your consumer, as well as a chance to understand the online market.
“Retailers could use data to understand how big Amazon is in certain categories. A great example of that is Petco, who sells on Amazon.com. Petco is a physical retailer with little online presence,” explains Bhavnani. It’s also a shortcut route to benefit from a trusted online reputation and resources without investing in a hefty online presence and distribution channels upfront.
Know That It’s A Long Game
Expanding an online footprint doesn’t happen overnight, and it requires active maintenance to stay competitive. It takes time to build and maintain positive social proof, garner peer reviews, figure out the right online channels, and tweak SEO. Savvy retailers are making use of the resources available to stay in the game.
Rather than fight against the competition, start aligning with them. Try shortcuts and list your products on platforms like Amazon that can reach your consumers right away. In the meantime, develop your long-term strategy. Above all, don’t bury your head in the sand. Know what’s going on outside of your walls and make use of data to expand your online footprint.