January 8, 2013
The Internet continues to shake up the retail world. In the most recent PowerRanking report from Kantar Retail, Amazon gained serious ground. It picked up 9.3 points and earned fifth place as a future Power Retailer.
The report, which polls leading manufacturers about the future of retail, ranked Walmart as the biggest player over the next 15 years. Other picks in the top five: Target, Costco and Kroger. While Amazon isn’t expected to challenge Walmart for the top spot anytime soon, this change in the rankings still represents a big shift for traditional retailers.
And perhaps an even bigger challenge for brands: How exactly do you stand out at a mammoth online retailer like Amazon? A recent Reuters article pointed out that many top brands are frustrated about being undercut on price at the site. Some third-party Amazon sellers have been selling merchandise below the minimum advertised price, and brands have taken notice. Wüsthof stopped selling its famous knives on the site due to pricing issues, but Home Depot took a different route, opening an official store on Amazon for its Hampton Bay brand lights and fans.
Luckily, Amazon offers some upsides for brands, too. The site’s Subscribe & Save program automatically ships households staples like dish soap, cereal and laundry soap to consumers—a service that may boost brand loyalty and sales. Right now the service includes such top brand names as Tide, Kellogg’s, Method and Fancy Feast. Amazon also just launched Amazon Pages for brands, basically branded micro sites that offer a larger presence within Amazon.com.
We expect this shift to more online shopping to lead to other changes in the retail landscape, too. As a recent StarTribune article pointed out, brick-and-mortar stores may avoid show rooming by partnering with brands to offer exclusive merchandise—a special scent or feature not available anywhere else. Reviews will also grow in importance as consumers whip out smart phones to check them in-store, and eventually, those reviews may show up with a digital display right at the shelf.
How do you see consumer shopping habits changing over the next decade? And what do you think that means for brands?
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