How Retailers Can Beat Amazon By Learning From Best Buy & Walmart
Local retailers who are nervous about Amazon Australia’s long-term impact will find reassurance in American-based Walmart and Best Buy, who are living proof that retailers can stand triumphant post-Amazon.
As America’s retail industry currently witnesses a 6% decline, shares in Walmart are at a high. Shares in Best Buy, Home Depot and Costco are also up double digits in 2017.
Here are three strategies these American retailers have used to combat the effects of Amazon:
- Establishing Themselves As A ‘Destination’
Professor of Retail Management at Purdue, Richard Feinberg, affirms that an ‘experience-orientated’ focus is a common factor in successful bricks and mortar stores:
“Retailers that want to succeed have to be an entertaining destination for consumers, especially Millennials”.
Best Buy has established itself as the go-to destination for advising consumers with home renovations and consumer electronics, which is especially relevant in the ‘smart home’ era.
2. Differentiating Or Selling Unique Product
Costco has differentiated itself from e-commerce players such as Amazon, by allowing consumers to purchase their products in bulk.
Home Depot has invested in products that are notably different than Amazon’s standard offering, helping to fend off the e-commerce giant’s influence.
Retailers should aim to integrate products that cannot be purchased from Amazon Australia, or are differentiated in their buying approach, in a bid to stand apart.
3. Controlling Costs
Walmart is living proof that smart cost management is an essential ingredient for long-term profitability.
The retailer has reportedly chosen against hiring holiday workers this season, in a bid to increase its profitability this quarter. Consequently, the retailer has boosted its forecast for the holiday shopping period.
Best Buy is also a testament to robust cost management, having successfully avoided high debt which caused the demise of rivals such as RadioShack.
Costco has engaged with suppliers to ensure its costs remain low and competitive.
Professor Feinberg, affirms the need for smart cost management in the current retail environment:
“When times are tough, such as they have been for the past ten years, executives need to really know what they’re doing”
“All these retailers control their costs, which can be more effective than simply increasing revenue”.