Why are traditional retailers struggling to embrace e-commerce?
We read about it every day, how businesses of all sizes across North America are losing out to Amazon. These businesses, some of whom were the ones crowding out small businesses ten and twenty years ago, include big names such as Target, Best Buy, and Sears. But now, one little word has their fate in its hands — innovation.
Worth more than money can buy
Without putting too fine a point on the criticism, it is hard to visit one of these giants of yesterday’s websites and not feel your toes curl inside your slippers. These days, we shop from home, a business’s website is its premises. But when you drop into many online stores you’re faced with one of two results, either the webpage is dated and clunky, or it looks almost exactly like the Amazon site, even down to the five stars rating system. At stores such as Best Buy, the price had always been the pull. But even when Best Buy undercuts their competition, they can’t meet Amazon for service or delivery. One-click shopping, Prime, which offers movies too, is an innovation that beats a few dollars off the ticket price.
Breaking its banks
While Amazon has been a household name since 2001, traditional retailers were slow to recognize the threat to their turnover until it was almost too late. However, some businesses are not giving up the fight. Those who are too big to fail, such as Walmart, are engaging their online competitor, fighting fire with fire. In 2017, Walmart woke up to e-commerce and started offering free, two-day shipping with every $35 purchase. They teamed up with Google to offer Express in response to Amazon’s Echo and even tripled their online offerings to 23 million items next to Amazon’s 500 million plus products. But still, not a single move on Walmart’s part has innovated in a way Amazon continues to do so from its online platform.
One of the biggest hurdles faced by traditional retailers in e-commerce, is understanding, what innovation means online. Entire company cultures and structures have been created offline and breaking this mold of thinking is tough work. We can see this from Walmart’s one point of noticeable success against Amazon, in grocery logistics. Both businesses launched a grocery pick-up scheme last year. Only Walmart already offers 1,100 locations while Amazon’s two locations are both in Seattle.
While Amazon and Walmart go head to ahead for the position of omnipresent dominance, the smaller players seem to have been left in their dust. But just what is stopping them from innovating?
I would ask, what their current USPs are, and how can these be translated into online experiences? Is VR shopping out of the question? Surely, the stores who have offered real shopping for generations are best placed to model the VR variety. Likewise, why expect the old guard to steer tech innovation? Isn’t it time businesses handed over their consumer interfaces to the professionals and treated vendors as strategic partners rather than competitors?
As we head into 2018, it’s time to realize, this isn’t the end of an era of breakneck innovation in e-commerce — it’s only just the beginning.