Target just revealed Amazon's biggest retailing weakness
Like Smaug the Dragon's underbelly in The Hobbit, the Amazon.com has a weakness.
It's delivery. Most of the time it works. But when it doesn't, customers get annoyed. Sometimes, the delivery service that Amazon uses in my neighborhood fails to make it through the front door of my building (even though Fedex and UPS are able to manage just fine) and this delays delivery. Sometimes, delivery gets held up because of logistics. And even when the package arrives, it's a huge pain in the rear to return something. Too many people need to be involved. But not one human being.
Target is figuring this out. The chain is fighting back with its own Black Arrow...and it's hitting the right spot. Earlier this week Target announced its hiring plans for the holiday season. And if you're a retailer, big or small, you should be paying attention. Amazon is.
According to a blog on its site, the chain is looking to add 70,000 more workers in its stores and another 7,500 people in its warehouses to handle the coming holiday rush, which are numbers on par with last year. It's important to note that the retail giant is getting an early start in the process - a sign of tighter unemployment times for all companies - and promises hiring events at its 1,800 stores in October. Hopefully, if you're a retailer, you'll be making your holiday hiring plans a little earlier this year too if you expect to keep up with the competition.
But that's not the most interesting thing they announced.
What caught my attention was another statistic in its announcement: "Our stores teams also play an important role in Target's online shopping experience," the blog said. "Today, about 30 percent of our Target.com sales are fulfilled by a store, either through Order Pickup or Ship from Store." According to another report, Target is using more of its stores - 920 this year up from 460 last year - to either fulfill or enable customers to pick up their online purchases.
See what's going on here? Target, and other big-box retailers, have discovered an advantage they have over online retailers. And that advantage is not just people - it's human beings. "I prefer to shop at Target or Walmart online," a friend of mine recently told me. "That way I can just swing by the store to pick it up. And if there's a problem, it's much less of a hassle to return the item."
Just like airlines and Windows 10, buying online can be great and convenient...when everything is working the right way. But the minute something goes wrong - a dopey delivery guy, a defective product, a snowstorm, a software bug - then everything seems to fall apart and becomes a headache. And online merchants, particularly Amazon, are no different.
Target and other brick and mortar stores are noticing that and so are their customers. Hence the huge increase in online sales they're fulfilling through their stores. This trend is not lost on Amazon's executives and is likely a big part of the reason why Amazon plans to open a hundred pop-up stores of their own. Like everything else in this world, it's all about balance. E-commerce has seen tremendous growth and has created a company like Amazon that's worth hundreds of billions of dollars at the expense of some brick and mortar stores that suffered declines. But, retail executives are fighting back. With Black Arrows. They're realizing that the best strategy is combining their efforts between selling online and selling (and providing a service) with human beings in person. Hopefully, if you're a smaller merchant, you're picking up on that trend too.
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