Why Amazon Can Be Stopped

Young people prefer shopping in stores

Millenials

By John Bajorek

A recent study published in the Journal of Consumer Marketing throws into question the doomsday predictions about Amazon’s unstoppable influence over the retail industry.

Despite the precipitous rise of Amazon and the explosive growth of online shopping, a national survey of nearly 3,300 shoppers recently concluded that Millennials are “less likely to purchase online compared to their older counterparts.”

Granted, this finding isn’t without a significant caveat: Gen-X and Boomer shoppers may buy online more, but Young People (a.k.a Millenials) actually use interactive technologies more for “utilitarian/information gathering purposes and entertainment,” according to the researchers.

These findings suggest the survival of the store instead of its much-prophesized demise, but also reveal a distinct cultural and generational shift: Young People turn to technology not just for practical reasons, but to meet emotional needs.

Technology isn’t simply something that helps Young People get something done, i.e. make a purchase quickly and efficiently. Technology and interactive media play a role in identity formation and lifestyle. Online shopping doesn’t do this for people. It’s merely a convenience. A provocative cover story, “Amazon Must be Stopped,” in The New Republic, argues that people have been “seduced” by Amazon’s conveniences, from free two-day shipping to monthly diaper deliveries. “We expect these kinds of conveniences now, as if they were birthrights. They’ve become baked into our ideas about how consumers should be treated.”

Yes, these conveniences are the new cost-of-entry for any brand that wants to thrive at retail, but online retailers still can’t do what stores can, namely play a role in shaping personal identity. Only stores can satisfy the emotional need for social connection – no wonder Amazon opening a store made headlines. Of course, consumption and identity have always been inextricably linked and shape American culture. It’s the merger of shopping – always an intensely social process – with interactive and social media that represents a new and fundamental shift.

Yet retailers still aren’t adapting quickly enough. Many delegate in-store technology implementations to IT departments without even inviting marketing to the table, or worse, outsource initiatives completely. Moreover, IT-driven technology integrations within the store still tend to focus on practical questions, i.e. does it save money? Does it align with supply-chain systems? Does it serve the objectives of operations? Of course, important questions, but more outward, consumer-based questions should drive new technology. Before embarking on in-store technology integrations, retailers should instead ask: Does this technology affirm shopping identity? Does it enrich a consumer’s lifestyle? Does it entertain? Does it cede more control to the consumer?

Why Amazon Can Be Stopped

Even though Young People may buy more in the store, a growing body of research indicates stores that fail to play an influential role within digital channels where Young People pre-shop, socialize, and participate in virtual communities first, won’t get the sale in the end. Young People want to do more than consume, they want to co-create, participate in the emerging sharing economy, or what some scholars have called the age of the “prosumer,” a development predicted by Alvin Toffler in 1980 and his ideas of the “proactive consumer.” With the rise of the makers and locavore movements, and even seemingly niche trends like the resurgence of home-based and craft brewing, it’s time for retail environments built on active consumption.

To cede this level of control to young shoppers, retailers must do more than merely remodel and refresh traditional store formats; it’s time to evolve the fundamental nature of physical retail, transitioning passive spaces into active retail environments. Passive retail is the way it has always been, and largely still is. Retailers are retaining control, dictating format, and forcing consumers to navigate the way they want them to shop.

This conceptual shift in the fundamental purpose of stores must influence the way digital technologies are deployed and integrated within the store environment. Below, I outline how active retail is different than the passive retail that exists today.

Active retail is intentional.

If passive retail was defined by mass-market products designed for many, the new era of active retail reflects the consumer desire for mass customization, with specialty products, from sneakers to jackets, designed for one. Rampant pre-shopping by Young People, or “information gathering,” means the serendipitous, impulse-driven buy is more likely to reflect the culmination of countless digital-based interactions prior to the consumer even entering the store.

It makes associates enablers of experiences v. managers of transactions.

The role of the associate must evolve to one of concierge. They must be community champions that engage with shoppers to co-create what’s next in fashion, not just ring up sales. This turns the store into a space where consumers can influence consumer culture; interact with stores associates and, most importantly, each other.

Active retail gives consumers a voice inside the physical store, not just online.

A store has always been a place for gathering and for expression, but physical space is a far more difficult place to aggregate consumer preferences. It’s yet to rival the digital world’s data-based commerce format, where countless consumer reviews and ratings are commonplace. For example, Nordstrom, now literally tags popular items on Pinterest inside the store. It’s time for retailers to create events that give consumers a way to have as much influence over future inventory choices and fashion trends as corporate buyers do today.

Active retail gives stores a way to respond to what is at the heart of the revolutionizing force within all of commerce – consumer empowerment, not their continued passivity. The passive consumer is passé. If stores don’t embrace active retail design and consumer-driven digital technologies, they will be too.

John Bajorek
John Bajorek
Executive Vice President, Strategic Growth & Innovation
WD Partners

John Bajorek is SVP, Brand, Strategy & Design, he directs a multidisciplinary team of strategy and design professionals who create retail solutions for domestic and international client brands. His thorough understanding of shopper experience begins with insights and strategy, and continues through branding and a holistic approach to 360 marketing, retail environments, and the spectrum of digital touch points including online, mobile, in-store and social media.

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Comments

  • In my view, Amazon is better-positioned than most of its competitors to act upon most of the opportunities you outline, if/when they determine that doing so makes sense. And when they do they will bring massive competitive advantages that no competitor can–in the form of behavioral customer data and logistics expertise.

  • Doing most of my basic CPG shopping at Amazon means that my physical world shopping can be done at the farmer’s market, the local artisanal bakery, or quirky local shops, rather than in big box stores where the experience is usually neither social nor engaging. Stopping Amazon could benefit mainstream retailers, but I don’t see that it would benefit consumers.

  • Purely excellent article. Retailers who adapt have a
    very bright future. And since the cost of IT/web have
    fallen off a cliff, and the power of social and micro-social
    are best managed by people (yes people), the big retailers
    and internet pure plays have much less advantage now.

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