In recent years, Amazon.com (AMZN) has caused turmoil in the retail sector. Nearly every other store saw shares fall–as Amazon’s relentlessly rose–so it’s easy to understand why they responded by pouring all their efforts into building their own e-commerce presence; and indeed, investors rewarded them (or punished them) often for their online sales.
Yet Peter Weedfald is trying to bring those factors back. Weedfald, senior vice president of sales and marketing for Sharp Home Appliances at SHARP Electronics, is also heading up the Sharp Radius program, in which the firm partners with retailers to help them own the roughly five-mile radius around their physical stores.
Weedfald, who was also the chief marketing officer at Circuit City for a time, notes that major retailers spend hundreds of thousands of dollars on new locations long before they ever break ground on construction. The firms conduct research the demographics and competition in a given area, because unless a new store can truly own an area, with an “iron fence” around the five-mile radius surrounding it, success will be elusive.
“Retail is about servicing imagination; about creativity plus relevancy,” he says, “it’s about building emotional capital and building a relationship with consumers.” The Sharp program uses search analytics to drive people to the physical locations nearest to them, to build that relationship and demonstrate convenience, and Weedfald that the results are “uncanny” leading to some accounts notching as much as a 75% increase in sales over a quarter or more. He attributes the success to the power of localization and to building a relationship with consumers that will keep them coming back–and realize that Amazon is the only convenient option.
Of course, that only works if retailers are wiling to see the value in their physical locations, he says. “I’ve never seen so many retailers work so hard to be in the sales-avoidance business.” Weedfald is referring to companies that are investing in e-commerce not in a way that complements brick and mortar, but to its detriment by dropping brands, making it difficult to get an associate on the phone, failing to improve the in-store experience.
Online is of course now an inseparable part of the retail equation, but as Amazon’s purchase of Whole Foods and creation of Amazon Go demonstrates, physical locations can be an asset, rather than a liability, if stores can harness them correctly. “It’s fun to talk about what’s going on online, but if companies have physical stores, and they aren’t going to own the five-mile radius around it, to own that community and build boomerang relationships that bring consumers back again and again, people will buy on the cloud…from Amazon.”
To read the full feature, visit Barron.com here.
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