Many large brick-and-mortar retailers rightfully fear the juggernaut that is Amazon. However, the degree to which they truly understand the enemy, or rather the nature of the fight, is questionable given their attitude toward technology. Amazon is a powerful retailer for sure, but that façade only belies the real reason big-box retailers have to be afraid; Amazon is, at its core, a technology company.
One clear example is the deplorable term Omnichannel. To understand the problem retailers are trying to solve, it’s worth remembering that in 2001, after Amazon had been operating on the Internet for 6 years, big-box retailers finally launched their on-line shopping websites. The key audience for this initiative was incredulous to discover that the “on-line” catalog bared little if any resemblance to the “in-store” catalog. To add insult to injury, the notion that the same audience couldn’t simply check inventory for a known SKU at the store down the street was flabbergasting. Why else did the website exist, other than to serve as a virtual storefront for the physical one nearby? A few years later, the big retailers repeated the mistake; when mobile computing became commonplace, they sliced up their catalogs based on whether the shopper was using an app on a mobile device or using a web browser on a mobile device. The appearance presented by this disjointed and disappointing strategy was plain: Traditional big-box retailers didn’t, and in many cases still don’t, fundamentally get technology.
Omnichannel is not some technology revolution, it is not a new paradigm, and it is not an entirely new approach to using digital technology in retail. It is a polite name for the myriad of methods by which retailers are trying to fix the problems they created when they intentionally separated their businesses, and more importantly their catalogs, supply chains, and their merchandisers into ‘channels.’
Amazon has one catalog, one supply chain, and one set of rules for merchandising; all made possible only by their adoption of, and discipline around, technology. When, where, and the method by which you purchase and receive your product are all attributes of the sale – not separate business units. This isn’t an attitude of ‘technology is a cost center,’ this is an attitude of ‘technology defines us.’ Here’s a heads-up to all the in-store / mobile retail technology folks: There is an above-likely possibility that when they open their brick-and-mortar store in NYC, it will appear, feel, and sell products just like their website. It might even make the Apple store look like a ‘nice try.’
The shot coming across your bow contains a simple message: Merchandising used to be about putting products on shelves; now it’s about technology. The juggernaut has been learning from your mistakes for three decades, and it’s not too late to get back into the game, but you (brick-and-mortal retailers) will have to reinvent yourselves from the ground up if you’re serious about competing with Amazon.
Written by: Nick Downey