Retailers are missing opportunities to win against Amazon

Everyone wants Amazon.
Everyone wants Amazon.
Image: Reuters/Brian Snyder
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Physical stores offer experiences and services that online-only retailers can’t, such as personal shopping and events.

So it’s odd that a lot of brick-and-mortar retailers fail to do the one thing Amazon can’t: advertise the benefit of shopping in a physical store to their online customers and incentivize customers to visit. A new report by L2, a business intelligence firm specializing in digital brand benchmarking, highlights how department stores and big box retailers know what will entice online customers into physical stores, but don’t promote those services online.

Physical stores are still vital assets for fulfillment and customer experience, according to L2. Extension of digital channels can provide valuable incremental sales for retailers but the big up-sell is convenience and free or discounted delivery. When surveyed, 64% of consumers say they would shop in-store if they were offered exclusive discounts.

Retailers who are succeeding against Amazon are those who can reproduce the key features of Amazon Prime—transparency, trust that information is accurate, loyalty, and increasing value for frequent shoppers. Only 18% of brands offer a discount for pick-up, but at least they tell their customers about it.

Customers buying from Amazon know when their order is going to show up. Yet, despite retailers improving on this front, nearly half of consumers say that they want better understanding of the order-to-delivery process. Amazon’s communication is rated as “excellent” by 46% of customers, while only 29% of consumers say the same of other retailers.

The companies that L2 says are doing the best at using digital to get customers into stores? Macy’s, Walmart, Walgreens, Michael’s, Nordstrom, and REI.