‘Amazon Effect’ forces traditional stores to find ways to get products straight to customers’ doors – Daily News

on Mar29
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The “Amazon Effect” has conditioned convenience-hungry consumers to become accustomed to doorstep delivery for everything from eggs to electronics — and its upending business models for traditional pay-at-the-counter retailers.

The strongest growth in retail is coming from digital channels. Retail ecommerce sales in 2019 are expected to climb 15.1 percent for the year to $605.3 billion, according research firm eMarketer. Not surprising, Amazon is dominating the market. In 2017, Amazon sales jumped nearly 31 percent to $177.87 billion. The online shopping juggernaut accounts for nearly half of the U.S. ecommerce market, according to eMarketer.

“Amazon is leaving the competition in the dust,” eMarketer stated in a mid-2018 report.

Walmart and Target, the darlings of in-store shopping for decades, are scrambling to adjust and adapt to the changing landscape with a host of tech solutions designed to satiate fickle and flighty consumers.

Target’s new small-format stores are dominated by self-serve checkout lanes. Walmart is also adding more self-serve lanes to its cadre of big box stores. The retailers are also meeting delivery demands by offering two-, one- and same-day delivery in certain markets.

Walmart has rolled out 2,100 grocery pickup locations and 700 merchandise pickup kiosks at domestic stores for on-the-go consumers. The retail giant has even experimented with employees delivering online orders on their way home from work.

The efforts are working. Walmart’s e-commerce sales grew 43 percent in its latest quarter.  Walmart has also created an incubator hub dubbed Store No. 8 for inventing — and investing in — ideas that will disrupt future e-commerce much like Amazon does today.

“Our company is moving faster and we’re accelerating innovation,” Walmart CEO and president Doug McMillon said in a third quarter 2019 statement.

Amazon has forced traditional brick-and-mortar stores to come up with innovative ways to get goods to customers who don’t want to leave the house.

San Diego-based GoShare, billed as “the Uber for trucks,” makes last-mile deliveries of large items for retailers like Big Lots, Marshalls and Sears. Postmates offers a courier-like service that delivers everything from alcohol to medical prescriptions to virtually anything else you might need.

Traditional supermarkets are taking a different approach when it comes to digital solutions.

Ralphs, Albertsons and Aldi are partnering with third-party delivery companies like Instacart to avoid the costly hassle of building a complicated system from scratch. Target is using Shipt for same-day delivery in select markets.

Looking beyond delivery, Amazon is disrupting retail in other ways.

Amazon Go stores that use sensors to automatically ring up purchases have popped up in Seattle, Chicago and San Francisco with the online retailer preparing to ramp up the autonomous checkout concept to as many as 3,000 locations by 2021.

Retailers are desperately trying to keep pace.

King Soopers, the sister grocery chain to Kroger-owned Ralphs, recently launched a pilot program that arms shoppers with barcode-scanning wands that allow them to scan as they shop and breeze through self-checkout stands.

Walmart tried a copycat version of Amazon Go called “Scan & Go,” a test rolled out at 120 stores, but the company quietly shelved the project without citing reasons in April.

Amazon has also begun testing self-driving delivery robots on the streets and sidewalks of a Seattle suburb that deliver packages to customers’ doorsteps. The e-commerce giant has received a patent for blimp-borne warehouses that will serve as “aerial fulfilment centers” for its envisioned fleet of delivery drones.

But Amazon has plenty of competition from ambitious start-ups eager to carve out their own niche. In December, Nuro began a pilot program that uses self-driving unmanned robot vehicles to deliver groceries from a Fry’s Food store in Scottsdale, Ariz., to customers living nearby.

Looking ahead, eMarketer says long-term tech innovations for online and mobile shopping will involve voice commerce (think Amazon Alexa ordering), social commerce (buying goods via Snapchat and Instagram) and use of augmented reality (remember the Pokémon Go mobile game) to create in-store shopping experiences without ever leaving your home.

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