You haven’t paid attention if you haven’t heard about the Amazon Effect. Amazon is both the world’s leading online retailer and a major provider of cloud services, competing with Microsoft. The “Amazon Effect”, or the digital marketplace’s impact on the traditional model of business, is primarily in the form of changing consumer expectations, and a changed competitive landscape. (Read, 2016, 2016). The traditional marketplace is a place where customers are offered a mix of price, selection, service and convenience. E-commerce has revolutionized the marketplace by offering superior convenience and selection. In the modern marketplace, the focus is on the customer’s experience. Physical stores are still the best option for immediate service and a personal touch. In order to stay on top of technology and changing lifestyles, tomorrow’s market will need innovation from both sides.
Amazon provides a frictionless, immediate shopping experience for customers. Traditional retailers find it hard to compete. The Economist reported that Macy’s, a large department store chain, planned to close 100 out of 728 stores in 2017. According to reports, other US chains also closed 10,000 storefronts in 2017. Amazon has conquered the world, much like Walmart did in America. Amazon saves consumers time and is a great way to conquer the world. Amazon is the leader in convenience, quality, and network. According to a recent SOTI study, 92% of consumers prefer physical stores with mobile features over traditional stores. Customers today are more concerned with convenience than ever before, and millennials have twice the likelihood of adopting new technologies and digital trends as compared to older generations (Read 2016).
Online stores offer more convenience for the consumer, as well as a greater selection. Comparing prices is also easier. The retailer also benefits from e-commerce. Amazon, for example, does not have to maintain a physical shop. The ability to accept orders 24 hours a day increases sales. Advertisement is much easier and consumers are also more accessible than in a physical storefront. The e-commerce model is more complex and expensive than the traditional business. In addition, shipping to consumers in bulk is far more complicated and costly.
According to a study conducted by Millennial Marketing, the six areas related to brand performance that millennials place the highest value on are: social circle (whether the brand is part of a consumer’s close social circle), self (whether the consumer connects emotionally with the brand), innovation (whether the company constantly innovates and grows), trust, or whether the brand puts the needs of the customer first, and accessible. According to a Millennial Marketing research, millennials attach the greatest value to six different aspects of brand performance. These include: social circle, self-connection (whether consumers feel emotionally connected with a particular brand), innovations (whether a business is constantly innovating and growing), trust (whether a business puts customer needs above all else), purposefulness (whether a firm adds value for the community), and accessibility. Amazon, for example, performs well in these guidelines. However they can improve.
Customers may find online shopping to be less convenient due to misleading images, long shipping times, potential damage, lack of interaction and security. Retailers cannot rely upon the advantage they may currently have because online ordering has become so common. Customers are able to return items with ease and the retailers can’t rely on this. Customers can now order online through traditional retailers and then collect and pay their order in-store. Some stores deliver orders directly to customers’ doorsteps. It saves consumers time, but they still have the security and assurance that their order is coming from an established source.
Opening small stores could be a way for online businesses like Amazon to address some of their disadvantages. These stores would not have any stock and would only be used to provide quality in-person customer service. These stores would allow the merchant more control of returns. Physical stores also help to make a business more trustworthy because a client can go there and speak to a representative. As a result, consumers see the business as much more than a call center. It is possible that staff can help customers to order, which will make the site and services more accessible. The personalization is enhanced by the fact that representatives can talk to customers in person and customize their services according to each customer’s needs. It can be very time-consuming to call companies and you might have to wait for long periods of time. This allows the store to serve customers better and also demonstrates that they care about their clients.
These storefronts are not without their disadvantages. These locations may not be the cheapest, but they could help boost sales.
As a conclusion, it is clear that traditional retailers must improve their online presence if they are to continue in business. Amazon is one of the many e-commerce giants that are attempting to adapt to this new marketplace. Apple sells its products in store, even though they’re all available online. Apple customers are looking for the Apple experience. They want to speak with a representative and be confident about their purchasing decision. Customers want to be able to access expert opinions, connect with a representative of the company, and receive immediate assistance.
