If you dnt like changeWar has always been a great catalyst for technical innovation. And in this particular war, a lot of reinvention is happening as two of the biggest players in the competition for consumer share of wallet are duking it out, big time.  Great rivalries also redefine what is possible, break records, change the rules of the game.

See these two recent events:  

1. Walmart Uses Rivals’ Discounts to Fuel New Loyalty Program

 This is brilliant because:

  • Only Wal-Mart can do it, it builds off of a core strategic advantage…the low prices they are able to secure from suppliers due to their size/volume.
  • It’s a way for them to capture real time pricing info of competitors quickly and efficiently (something AMZN has been doing for a while, and built upon further with their app below).
  • It’s a simple value proposition that naturally evolves into a new level of relationship with their customers…building their digital engagement to higher levels.
    FYI – Most brick & mortar retailers see digital customer engagement between 5-10% – considering both initial opt-in and ongoing frequency of engagement. As a defensive tactic against the coming ecommerce evolution, all retailers need to be strategizing about how to improve that metric now. Also, for your info, just promising “coupons” has already been tried, by almost everyone and has strong but limited appeal. To get bigger, you must thing broader – as WMT has done here.

2. Amazon just unveiled a new smartphone called the Fire Phone with a Built-In Showrooming App. 

If you throw out,for the sake of argument, whether the phone itself is going to be successful or not – the move to include a built-in showrooming app is a critically strategic piece of information for us in this space and the approach is brilliant because:

  • Only Amazon can do it, it builds off of a core strategic advantage…the ability to be everywhere, carry everything and adjust its price “on the fly” based on current price/market information (something brick & mortar stores are going to have to figure out how to do, if they want to combat showrooming attrition).
  • It’s a simple consumer value proposition that is also, a way “into a new level of relationship with their customers…building their TACTICAL, ON-SITE engagement to new levels. If they can get 8-10% of their digital customers to use the showrooming app, the would be huge…an excellent example of usurping a competitor’s advantage to become your own.

But what’s important is not the specifics of what these two companies are doing, what’s more important is HOW THEY ARE PLAYING. These are NOT “play nice” moves, and if you – or your team – are hesitating to take action because the path is not clear… let me tell you right now that the “right path for you” isn’t ever going to appear clear enough for you to avoid risking a bad decision. So be careful not to intellectualize and debate over what is may or may not happen to the point of indecision.

CAUTION: In companies with a lot of resources, indecision looks like doing too many things at once and finishing none. (In companies with few resources, indecision looks like not doing anything.)

If “not enough resources” is the excuse you are hearing, you either have the wrong team or a weak strategy or both. You do the best you can with what you’ve got, where you are – spreading your resources too thinly because you are afraid to risk making a bad decision is a bad idea.

Please realize, I am not saying that you should be doing what these companies are doing, that would be foolish. You can’t move fast enough to match them – no one can, they can’t even move fast enough to catch each other. You have to play with the same intensity, yes,  – but do not try to deploy the same strategy. Instead… think hard and creatively about where your unique opportunity to compete resides:

  1. What do you have that Walmart and Amazon do not?( HINT: Many of you have location, convenience, shopping experience, quality perimeter items,  humans… start there!)
  2. Who values your special advantage?
  3. How can you amplify it?
  4. Is there any way to amplify it so that it drives your digital consumer engagement (both initial opt-in and ongoing engagement) above 10%?
  5. Is there any way to use Walmart’s tactic to your advantage?  (Hint: Many of you are way more experience at loyalty marketing, and have consumers who have made investments in it… can you use that to “reverse the polarity” of Walmart’s strategy?
  6. When a customer opens the Amazon showrooming app, they are in your store… and you can give them the product right then and there, with no shipping cost or wait… anything you can do with that?

Grocery is going to go online – not because eCommerce is gunning for it as a category, but because there is a lot of investment gunning for and protecting the 75% of all retail spending that occurs within a mile of the home. Traditional grocery stores have about 2-3 years (I think)  to figure it out, or they will be a casualty of a war that is much bigger than them.

Susan O’Neal Gear has over 20 years of experience at the intersection of consumers, marketing and technology. Passionate about all aspects of a consumer’s relationship with brands and retailers, we’re spending the next year looking for new, groundbreaking thought leadership  – if not disruptive solutions – with the potential to redefine the parameters of consumer loyalty. If you also want to see some game changing happen -then follow Upstream Insight, contribute your voice, share this post…do something! 

(Special thanks for Will Gardenswartz for critically helpful info!)

If you dnt like change