Can Service Offerings Help ‘Amazon-Proof’ Retailers?
Many retailers seeking ways to enhance the value of the shopping experience are turning to services, whether offered in-store or in the shopper’s home. In a Shop.org Big Ideas session, titled How To Compete in the New Era of Retail, Oisin Hanrahan, CEO and Founder of Handy, shared how his company has partnered with retailers such as Walmart, Wayfair, Art.com and Lamps Plus to deliver in-home repair services that help these retailers “Amazon-proof” their business models.
The RTP team discusses whether services like Handy, and other innovative offerings such as the Williams Sonoma Design Crew or IKEA’s recently acquired Taskrabbit, can shift the tide for companies trying to hold on to market share and build better customer engagement.
Debbie Hauss, Editor-in-Chief: Retailers need to find new ways to appeal to today's shoppers, who are looking for personalization, experiences and better engagement with brands. If services would work well with your brand, it's a great idea. I don't think it will work if it is forced, though. Some retailers focused on new services offerings include: Walmart and Postmates, Walmart and Handy, Nordstrom’s Nordy Club, CVS and Glamsquad, and of course Whole Foods and Amazon.
Adam Blair, Executive Editor: Whether or not offering services can actually “Amazon-proof” a retailer, they are undoubtedly a competitive differentiator — particularly given the perpetual time deficit that today’s consumers struggle with. In-home product repair and assembly services are particularly valuable, given that most schools no longer offer “shop”-style classes, where people previously could pick up the rudiments of handling tools. (Of course, even master cabinetmakers have been flummoxed by assembling IKEA bookcases, but that’s another story.) Retailers also should put themselves in shoppers’ shoes when designing services: I recently got back from a vacation in London that included trips to the Camden Market and Portobello Road open-air markets. These areas have hundreds of small merchants and are popular with tourists, and I would have loved it if they also offered an Uber-style service to take purchases back to visitors’ hotels — or even better, to ship them home at reasonable rates. Even something as simple as “not carrying bags” can be considered a service.
Glenn Taylor, Senior Editor: To me, the revitalization of services harkens back to the concept of “Main Street retailing,” in which shoppers seemingly had all of their needs met within a single compact area of the town. It may have taken major retailers a while to figure out how to bring back this concept, but the partnership/acquisition route appears to be working. The service moves might not immediately give retailers a way to take market share away from Amazon. However, they will certainly make these retailers more aware of their strengths and weaknesses, and improve their chances against their own direct competition. The Porch partnership with Overstock is a great example of this: many home improvement products bought on the site simply aren’t ready to go right out of the box, and not every customer has the time or capability to learn on the fly how to put them together. With immediate access to Porch’s network of 300,000 vetted home service professionals, Overstock consumers would be less tempted to shop elsewhere for their home products.
Bryan Wassel, Associate Editor: These services can be a strong differentiator, but the trick is making sure they truly stand out from the competition, preferably drawing upon a unique aspect of the brand. For instance, there is nothing stopping Amazon from launching its own repair service — the e-Commerce titan is entering the health care industry, and launching (or acquiring) a TaskRabbit-esque service would be a much less complicated endeavor. Retailers looking to add services to their offerings should make sure they both reflect the retailer’s values and stand on their own as a worthwhile service, like Best Buy’s Geek Squad. Simply adding an unnamed installation team or quietly providing repair services won’t make much of a difference in the long term.