Can Brick-and-Mortar Stores Survive Amazon Prime Now?

Business.com / Starting a Business / Last Modified: February 22, 2017

Can brick-and-mortar stores compete with Amazon's newest service, Prime Now? Here's what you need to know.

Brick-and-mortar stores are not going to be obsolete anytime soon, however, they have been competing like crazy with one of the world’s largest E-commerce companies: Amazon.com.

Although it shut down its Amazon Local app and services as of December 18, 2015, the shopping giant has something else up its sleeve. Amazon Prime Now, a downloadable app for iOS and Android users, seems to be godsend for dozens of people who have tried it. From groceries, gifts, to goodies, the service will deliver them for free within two hours, or you could pay just $7.99 for one hour of waiting.

If you think about it, it looks like brick-and-mortar shops can’t compete. After all, how could anyone beat the convenience of getting what you want without ever having to leave the comfort of your home? Contrary to that belief, there’s a lot of advantages that physical shops have. So if you own a local brick-and-mortar store, don’t despair: Amazon can’t kill your business yet. Here’s why.

Related Article: 7 Surprising Ways Online Reviews Have Transformed the Path to Purchase

Brick-and-Mortar Stores Preferred by 7 in 10 Online Users

According to a 2014 study, seven in 10 online users said they bought products from physical stores at least once every month. Online shopping was in second place, while mobile purchases came in at third. In another research, 71 percent of Amazon buyers would choose to shop on an Amazon store over online if that option was available. This is because unlike digital shops, physical stores allow customers to experience the products.

Apparently, this is the one thing Amazon and similar online services can never replicate. The experience of touching and testing merchandise may be an old tactic, but it’s undoubtedly still effective. The sense of touch (along with the other senses such as taste, smell, and sight) is what retailers use in order to get customers to actually buy the product. In fact, experts recommend that people refrain from touching merchandise if they want to save money, because touching creates psychological connection. This is what drives customers to purchase said item even if they know they don’t need it.

But not everyone enjoys this experience. A huge con against brick-and-mortar shops is convenience. Some folks aren’t as willing to go through the trouble of leaving their houses, finding a parking spot, and lugging shopping bags around; especially nowadays as they know there are easier choices. This is the gap that Amazon and their new service, Amazon Prime Now, are trying to fill.

Where Brick-and-Mortar Stores Should Focus

It can be tempting to immediately move your entire inventory online, but don’t be so hasty. Focus instead on what makes your brand and your store stand out instead of trying to beat an online giant.

Related Article:Opening New Doors: E-Commerce Tips for Small Businesses

  • Exclusivity. Although Amazon Prime Now is working towards expanding their selection, it’s still very limited (i.e. Los Angeles partners include Sprouts, Bristol Farms, and Sprinkles Cupcakes). So if you make your own products, exploit this advantage and cater to people who love giving items not found anywhere else.
  • Customer Service. Never underestimate this crucial element. Influential brands like Nordstrom have used this time and again to retain their customers. One of the things that make a big impact is responding to complaints, particularly on social media. Make sure you give a clear time frame of when users can expect a response from you.
  • Add-ons. Amazon is not the only company who can provide free delivery and Daily Deals. Local brick-and-mortar shops can also add this on their list of marketing strategies. Is your shop near a residential area? Why not provide an option to reserve online and pick-up in store? Planning to launch a new product? Give out samples and urge customers to pre-order. Details do matter, and a store with the most attention to it wins.
  • Privacy. Online users in general, dislike their information being privy to others, even marketers. This is perhaps one of the biggest advantages of brick-and-mortar stores. There are no cookies that track their clicks and website visits. Assure customers that information, like their email address, is only going to be used for newsletters and updates from your store.
  • Socialization. Amazon doesn’t hold weekend baking workshops or invite people for a 10 percent off on cocktails every Fridays. Make people feel special: greet them by their first name, smile often, and let them be the first to know of your new offers. When customers walk into your store, they do so because they know there’s a real person behind the counter.
  • Integration. Just because you’re a small local shop doesn’t mean you should be behind trending technology. By cleverly integrating digital services such as free WiFi for your customers, you instantly level-up your game. Why not use QR codes people can scan so they can see reviews of your products? Provide video demos of your merchandise as well so customers can watch how it is used properly.

Remember all the good reasons why your customers buy from you. Your shop may be the only one in the city that sells amazing cupcakes or homemade affordable soap. Own your products. Train your employees. Answer complaints promptly. Don’t forget: not everything can be digitized.

Related Article: Buyers and Sellers, Beware: Data Dangers of Ecommerce

The Bottom Line

Physical stores will never die. In fact, in November 2015, Amazon opened their first brick-and-mortar extension in Seattle’s University Village. This proves that even the online shopping giant recognizes the power of physical retail when it comes to doing business. Meanwhile their latest service, Amazon Prime Now, is undoubtedly going to be huge with several improvements.

The bottom line however, is this: take care of your customers and they will take care of you. Mobile and social media may be hip right now, but it cannot replace real human interaction. That feeling of seeing the perfect product, trying it for the first time, and seeing the cashier smile at you, these are all part of the buying experience. As long as business owners value relationships, local brick-and-mortar shops will live on.

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