How Retailers Are Working to Compete with Amazon

How Retailers Are Working to Compete with Amazon

In the world of retail, Amazon is the pack leader sporting a visible from space target on its back. The changes Amazon has made to the retail landscape has the old guard dying off, this is highlighted by companies like J.C. Penny, Sears Holdings, and Toys R Us closing stores left and right. For those who are clinging on and fighting their way back up front, gaining an edge to use against Amazon is tricky and timely business. Every move taken seems either behind pace or countered by a series of new moves Amazon is experimenting with, making the Seattle-based behemoth a true retail hydra with each small success being met by multiple new challenges to face.

Confronted with the choices between “shop from anywhere” and “shop exclusively at our location”, the latter is in an uphill battle, but not a futile one.

Walmart and Macy’s are two survivors of the digital shift who are moving forward. This is how they are doing it.

New Identities for New Challenges

Macy’s

Macy’s is slowly becoming a discount store. With the expansion of Macy’s discount department, Backstage, they are able to draw in foot traffic from bargain hunters.

Backstage operates as a cross between an outlet and a traditional department store. It has its own buyers, so while they stock Macy’s brands, there are apparel and accessory brands not normally found in the full-line department stores. Nearly everything available in the Backstage doors is available at least half off of the original retail price, and the tags all show the difference. These are not clearance items, but instead are a combination of season overstocks and deals that Backstage’s buyers make with vendors.

Backstage buyers are stocking shelves with cosmetics, apparel, shoes, gifts, jewelry, activewear, toys, children’s apparel, large home goods, bedding, framed art, lamps, and picture frames.

Macy’s is using Backstage to compliment sales in their standard department store locations by allowing Macy’s cards to be used at Backstage locations. So, if you buy at Backstage you can still earn Plenti points to spend at Macy’s. While this particular feature doesn’t match the “shop from anywhere at any time” convenience Amazon provides, it does improve flexibility and help funnel traffic of bargain savvy Backstage shoppers back to Macy’s department store locations.

Walmart

Four new brands and a new emphasis on fashion and quality, Walmart is creating its first kids line in addition to two new women’s line and narrowing down the George line to be exclusively for men. Aggressively working to rebrand themselves to be front of mind to fashion-conscious shoppers, Walmart is trying to expand its target demographic while maintaining its one-stop shopping status.

Standing up against Amazon, in part, means providing something that Amazon cannot. An instagrammable Walmart exclusive fashion line is precisely what these four collections are aimed to present.

Walmart first became the world’s largest brick and mortar retailer by appealing to a mass audience with a large range of products for low prices. While this appeal works well for budget-conscious shoppers, it doesn’t translate as well into fashion-conscious bargain hunters who value quality and aesthetics just as highly as the dollar sign on the tag. This way retailers can bring people in looking specifically for their unique line as well as bring in the bargain savvy.

What’s Next?

Existing models can’t keep the pace, and traditional retailers are by large too far behind to beat Amazon at their own game with data analytics. They can, however, continue to provide new appeal and value to their own locations that Amazon’s current model and structure cannot accommodate.

While all retail stores are transitioning to accommodate online shoppers, a larger part of retail strategies is to continue to focus on, and reinvent, what they do best; providing value to their locations. Searching for a balance between maintaining a traditional retail experience and catering to a growing online crowd, changing retail models to include desirable exclusive product lines and a Goodwill-style discount stock rotation are bolstering the transition for Walmart and Macy’s.