Time Magazine has a short, but powerful recap on how stores aim to compete during the holiday season. It’s good to see stores fighting back.
The most potent weapon that online retailers have is price. That strategic advantage — low-price leader — has served Amazon well. Despite razor-thin margins, Amazon is rapidly growing and investors have rewarded that growth. To be clear, competing on price is a terrible strategy for anyone other than the low-price leader.
In comparison to Amazon, the companies who invest in stores — whether they are banks, health care clinics, or retailers — must aggressively play to convenience, quality, and service. These are the elements which differentiate them and provide the customer with real value.Recently, in an effort to upgrade my wardrobe, I purchased several pairs of shoes from Zappos. None of them fit. Consequently, it was a huge pain to find a UPS store, pack them up, and return them. Worse yet, I didn’t have confidence selecting them because I’m not particularly knowledgeable about men’s shoes. At a nearby men’s shoe store, a helpful clerk found several pairs, helped me try them on, and ordered a pair that wasn’t in stock. I was in and out fast, served well, and very happy. For many people, Zappos offers a great value proposition. But for many others (me!), it doesn’t.