For big box and department store retailers, the fight against Amazon isn’t about winning. Table that. First, they have to defend their reason for even still existing in an Amazon-dominated industry.

“We’re redefining our purpose. Macy’s heritage isn’t going to be enough to guarantee success,” said CEO Jeff Gennette at the Shoptalk retail conference in Las Vegas. “Yesterday’s playbook isn’t going to work for tomorrow. Our customer is moving fast. She has one foot in the future, and we need to catch up.”

Macy’s and peers like Nordstrom, big box retailers like Target, and other traditional brick-and-mortar stores like Ulta are repositioning as they figure out what they can leverage in the age of Amazon to keep customers from straying. They may not be able to beat Amazon, but, the goal is, they can prove that Amazon hasn’t squashed their ability to stay in business.

The strategy: Invest in private-label and other inventory exclusives, turn physical stores into fulfillment centers, position in-store employees as category experts and drive participation in loyalty programs, while continuing to invest in e-commerce and mobile commerce capabilities.

The implications: Competing on convenience will still be critical — and physical stores will play an important role here — but to keep customers, retailers need to nail differentiated inventory, improve the shopping experience across online and in store, and reorient strategies to put the customer at the center.

“If you’re a retailer you need to have a strong Amazon strategy, no matter what,” said Michelle Grant, head of retailing at Euromonitor. “And if your strategy is to not work with Amazon but compete with it, you better be making a strong case for why you’re worth the customer’s time and money today.”

Here’s a breakdown of how retailers are making that case in different areas of the business, even when they’re not mentioning Amazon by name.

Stores and their employees
What does Target have that Amazon doesn’t? Eighteen-hundred store locations. Retailers are determined to turn their often unwieldy store networks into Amazon armor.

  • Target CEO Brian Cornell said the company considered its options as online shopping posed a threat to the “Target run,” or the customer habit of going to Target for one item and leaving with a bunch of stuff they didn’t plan to buy. To help customers wherever they were shopping, Target rolled out capabilities like buy online, pick up in store and curbside delivery.
  • “Our guest had decided for us. Their expectations around transparency, speed, simplicity and convenience changed,” said Cornell during a Shoptalk keynote. “Technology was just the accelerant. Instead of defending traditional models, we chose to embrace change.”
  • Target isn’t just pushing in-store pickup. In December, the company acquired Shipt, a delivery service, to localize deliveries using stores as fulfillment centers. The goal, according to Cornell, is to be able to offer same-day delivery across the U.S. That last mile is something Amazon has yet to crack itself, and it’s investing in drone technology to help figure it out.

At Macy’s, updating the in-store experience is part of an ongoing restructuring strategy; it plans to roll out technology and remodel top-performing stores.

  • “We’re getting brick-and-mortar back to growth,” said Gennette. “We’re using it as an advantage and an edge over the competition.” By the end of this year, Macy’s plans to roll out mobile checkout — kiosks that let customers independently scan items and pay — in every store.
  • Macy’s is also rolling out a Growth 50 strategy: Fifty of its top-performing stores are going to be revamped from head to toe, with renovations, new in-store technology, more staff and extras like cafes.

Loyalty
Retailers are out to prove that customers aren’t devoted to Amazon and its Prime program alone.

  • Ulta Beauty’s Ultimate Rewards program, which has nearly 28 million members, drives over 90 percent of the retailer’s sales, and according to CEO Mary Dillon, this customer group drives the company’s strategy from a brand partnership, marketing and data perspective.
  • “All of us are thinking about this big retail transformation and how we apply it to our business model,” said Dillon on stage at Shoptalk. “How do you navigate forces and factors today? The changing consumer is the critical piece of all of this, and we’re all competing on convenience, personalization and experiences.”

It’s not just programs that play into retail loyalty. Retailers are investing in store employees to bring customers back — something that Amazon isn’t able to use to its advantage.

  • “Retail is not faceless,” according to Cornell. He was referring indirectly to Amazon, of course, and he went on to lay out all of the ways Target is rethinking how it hires its in-store associates and how it staffs stores in order to keep category “experts” — people with experience in beauty, or home, or electronics — around stores.
  • At Macy’s, where the beauty department is growing, the company is giving salespeople in the beauty department the platform to become micro-influencers, according to Gennette.

Technology
Buy online, pick up in store capabilities seem like child’s play in contrast to Amazon Go’s checkout-free stores of the future. But while retailers can’t compete with Amazon’s resources and tech capabilities (the company employs “thousands” of employees in machine learning across the entire business, for example, per Amazon Go’s vp of technology Dilip Kumar), tech is bolstering efforts in anti-Amazon strategies.

  • Cartwheel, Target’s shopping app that stores coupons and promotions personalized for shoppers, was built in direct response to Amazon, according to Cornell. The company realized that customers in stores were comparing Target’s prices to Amazon’s prices, so it built Cartwheel as a way to minimize price discrepancies and — back to loyalty — reward returning customers.
  • Macy’s is doubling its online assortment and launching a vendor-direct platform this year that will bring direct brand sellers to the Macy’s platform. As the company’s web inventory becomes more sprawled, the company is investing in personalization to help curate the assortment. (Better late than never.)

The final word: “You can’t starve brick-and-mortar to feed e-commerce,” according to Gennette. “We have a lot of work to do on both sides.”

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