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Did you hear? Amazon is buying Whole Foods.

What you need to know now, and how you can change. 

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 When they announced their acquisition of Whole Foods, Amazon set the retail world ablaze. Suddenly, the online retail giant was jumping the shark to brick and mortar, and a lot of people took notice—as Amazon’s all time high stock prices are a testament too.

But the “end of days” are not here for all of retail. As Amazon looks to bring scale and efficiency to the physical store environment there are many plays open to smaller retailers to defend, and offensively plan for, the changes to come. Here are three things you can do now, and three example retailers to learn from.

Reinvent Yourself
According to RetailDIVE “Retailers are not offering enough of a differentiated experience or…product mix to make it worth showing up for. If we accept the basic premise that it is easier (and perhaps less expensive) to buy product on-line, there had better be a reason to show up in a store.”

They go on to share the example of Men’s Clothier Bonobos who uses engaging sales people to help shopper quickly find the right sizes in their “showroom environment” and then ensure the clothes are delivered to the door two days later. This is great service in contrast to stores like Banana Republic that lure shoppers in with big discounts only to leave them with poor customer service and a disorganized store full of “cluttered and uninspired displays”.

So, ask yourself—how can I reinvent more store experience to offer something that Amazon can’t?

Learn from the Winners
And who’s winning? There are three main places we found winners. First, discount stores like Dollar chains (probably not a place for gift stores to play). Second, stores that offer product discover + value like Costco or T.J. Maxx (getting warmer but still probably not the best option for gift). Finally, stores that bring together discovery + exclusive on-trend product are seeing booming sales. Think West Elm, Lululemon and Ulta (Bingo!).

How can you bring that sense of discovery together with the right product mix in your store? Why not take a visit to a few stores doing it right, to gain some inspiration? Purely for research purposes though. 😉

Be Where Customers are Looking
It’s a known fact—your customers are shopping online. If your products aren’t online, that’s a miss. BUT getting yourself into ecommerce can be expensive: from the cost to setup the platform, create beautiful product pages, to shipping items (since shoppers are trained for free 2-day shipping by Amazon and Walmart) can lay claim to your profitability. So how to strike a balance?

Consider offering free local delivery on larger products (like furniture). Think about using other platforms like eBay or Etsy if you have unique, hard to find or handcrafted items. And if all else fails, post your new seasonal items to your website with pricing info and the suggestion to call to place a personalized order for pickup or delivery.

Now, for three retails doing things right:

  • Lowe’s: home improvement retailers benefit from the high price of shipping the bulky goods they have on offer
  • Costco: The bulk retailer benefits from its gasoline business, an item that Amazon’s Whole Foods doesn’t sell
  • Walmart: Even though America’s largest retailer fights Amazon head on in most markets, Hottovy says Walmart’s sheer scale and close relationships with suppliers means it can compete on price.

As Amazon looms an even greater threat small shops who plan for their market entry and differentiate their product, learning from others’ success and offering expanded shopping options will continue to see success.

How are you feeling about Amazon’s purchase of Whole Foods? Is it a threat to your store or just one more headline? Are you planning to make changes to your shop in response? Share with us in the comments below!



Melrose International is an industry leader in wholesale home décor, giftware, and seasonal items. Providing outstanding products, service, design, and value since 1985!

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