Image having your computer crash Sunday night and, after not being able to fix it Monday morning,  you order a new one from your phone or computer at work on Amazon.com.  By the time you get home from your workday it’s waiting at your doorsteps.  Want to exchange and try another?  Ship it back and have a new one the following day arrive in exchange.  Sounds good as a consumer right?  Well, this same-day shipping service from Amazon will soon be a reality for most brick and mortar retailers to compete against, both single location or big box chain.  Here’s how retail stores can adapt today to stay connected to their loyal consumers.

While many of us sleep each night, numerous retail business leaders are not.  Some are awake plotting tactical moves as change agents while others are scrambling to adapt as they see eCommerce fears quickly becoming punishing bottom line realities.  Most notably, Amazon’s strategic direction has left Best Buy, Sears, Walmart and other major retailers to start aggressive courses of actions. Unknown to many, Amazon has quietly been setting up large inventory warehouses in a city near you.  Or upwards of ten such warehouses in major cities.  Why?  The plan has been to offer same-day shipping on nearly all of the major items they sell.  As you can see in this article from last summer projecting the impact of this new offering, it will take away the convenience advantage that retail stores hold over online today.

This priority shipping strategy has already proven hugely successful with Zappos.com for shoes and clothing apparel.  What Amazon is looking to do is to apply this convenience to all goods.  While this same-day-shipping service will pose the greatest threat  for retailers of tangible consumer goods, there are few businesses that aren’t at risk.  Recently, Business Insider reported that  Amazon is even looking to set-up online grocery ordering with same-day-shipping!

Staying with the computer replacement order example, how does a Best Buy, CompUSA, Circuit City (oops), Office Depot, etc. compete with that? The first step could be that of a copycat strategy and try to offer same-day shipping.  In fact, I recall Best Buy promoting online ordering with in store pickup– but that doesn’t really add much convenience value does it?  Walmart, however is actively pursuing this strategy.  As you will see in the image below, they are already facing an uphill battle as Amazon can easily undercut their pricing given the low overhead from no physical store locations to maintain.

One major item that’s preventing these stores from rushing into a similar strategy as Amazon is the fact that Amazon has been very aggressively buying and securing rank with Google Adwords and Facebook Ads for thousands of commonly searched goods, as well extending their re-marketing campaigns into search.  Additionally, these other mentioned companies are not in strong fiscal positions to re-scale and setup delivery teams in their active markets, beyond Best Buy’s Geek Squad’s install team.  Clearly, these companies have realized they have lost a significant first-mover advantage and will have greater barriers to entry to compete with Amazon for online shopping with same-day shipping.

Where Best Buy has seemingly chosen to focus their efforts is to go mobile.   Not just to increase their mobile presence  for  Apple or Droid users, but also to downsize their retail stores and set up smaller stores or mobile kiosks in key traffic locations.   This action to go where consumers are still actively shopping and seeking entertainment is a logical move.  These mobile kiosks and stores are appearing at local malls near movie theaters, food courts and restaurants.  The overhead is low and the consumer reach is exponentially higher and more convenient.  Inventory all exists at warehouses and can be shipped if not available on hand.   It’s a start in the right direction, but will it be too little too late?

Also, what does this mean for the small business ‘mom & pop’ retailer competing against both the larger retailers and online retailers?  Their last advantages are their community ties and ability to actively get out into the community to connect with consumers.  In my local neighborhood of NE Minneapolis, the local retail shops have found clever ways to bring potential customers into the area and their stores by hosting and organizing several entertaining events.  These include farmer’s markets, art festivals and themed races.  Some come to participate but most come to be entertained and the increased window shopping has led to new revenues for these area business.

Additionally, many of these business are highly conscious of the importance of building their online presence and standing out among big box retailers and online retailers in search and social.  For specialty goods stores in my own neighborhood, like Chuck & Don’s Pet Supplies and Patina, engaging their core customer base with community events and social media has become a priority.   Both are seemingly aware of the social media power that Target, Macy’s, PetCo, etc. are building along with the large communities they are monetizing today.  For these two stores, they are warding off new online threats as a retail store by also using social marketing and web strategies to engage local individuals  along with their online communities to create heightened word-of-mouth and visibility.

With mobile apps that can accurately predict our buying preferences already in play, the time for all brick and mortar retail stores to re-craft their push marketing strategies is now.  By spending as much time engaging customers in the community and online as they do in their store, these businesses will retain their customer base loyalty and continue to thrive.  The competition is getting more active and agile- time retailers do the same.

This blog commentary is not intended to scare anyone who owns a retail store.  Rather, it should give all a consciousness that the two remaining advantages large and small businesses have over online retailers, convenience of purchase and community ties, are under strategic attack.  Hopefully, this awareness will encourage any potentially affected to take the appropriate actions today to maintain their competitive advantages in these areas.