Jet com will successfully compete with Amazon
3 companies well positioned to compete with Amazon
We've heard a lot over the past few months about the retail apocalypse and how retailers who fail to adapt to the changing environment will go under. I will not go into what this situation is or not is - my colleagues have already covered this in detail. Instead, I thought it made more sense to look at several companies positioning themselves for the future.
There is no question that e-commerce or an omnichannel strategy has become essential for companies to be able to survive in the competition. Amazon.com (NASDAQ: NASA) made it clear that e-commerce is the future, and at that point there is no going back.
Each of these companies has a different approach to the e-commerce revolution. Read on to find out why I believe that Nordstrom (WKN: 867804), Costco Wholesale Corporation (WKN: 888351) and Wal Mart stores (NASDAQ: NASA) are among the best that can compete with Amazon.
Adapting to change
Nordstrom represents the paradoxical side of retailers: increasing online sales while adapting physical stores for those who still prefer to shop the old-fashioned way. The company takes a unique approach that can only be the future of brick and mortar retail.
At the end of last year, the company announced the debut of its concept retail store. The store will be just 3,000 square feet - significantly smaller than the average store, which is 140,000 square feet. The concept store will focus more on service than shopping, with personal stylists offering fashion tips, in-store pickup for items ordered online, as well as beer, wine and cold-pressed juices. The locations will also offer on-site changes and adjustments, aisle pick-up and same-day delivery.
For the nine months ended October 28, Nordstrom reported that Nordstrom.com online sales increased 14% over the same period last year, while Nordstrom Rack HauteLook increased 26%. Those gains weren't enough to offset weaker in-store sales, but the numbers are encouraging.
It remains to be seen whether the local concept stores will ultimately be successful, but the company's willingness to innovate will serve Nordstrom well in a future shaped by e-commerce.
In the first quarter of fiscal year 2018 (which ended November 26, 2017), Costco saw sales increase by 8.7% in the US and 8.2% abroad compared to the same quarter of the previous year (excluding changes in exchange rates and fuel prices). This resulted in sales on comparable sales areas that grew by a total of 7.9%. Traffic at the company's warehouses grew 5.9% worldwide and 6.6% in the US.
Even more impressive was Costco's growth in e-commerce sales, which increased 42% year over year. The company takes a multi-faceted approach that wins through with its customers. Costco has been testing dry deliveries of goods for two days along with same day delivery for perishable goods such as groceries. The promotions offered on the website were successful in drawing customers to the company's physical stores, while the signs on store locations announced online shopping.
With member retention rates of around 90%, increasing visitor numbers in the branches and strong growth in online sales, Costco shows how the multichannel approach can keep Amazon in check.
Save money, live better
In 2015, what happened to Wal-Mart what many believed was unimaginable: The company suffered its first drop in sales since going public in 1970. That may have been the stimulus the company needed to start thinking seriously about selling online. The following August, Wal-Mart announced that it would acquire e-commerce startup Jet.com for $ 3 billion in cash. More importantly, however, was the news that Jet.com founder Marc Lore would continue to run Wal-Mart's online sales operation, which gave the flimsy retailer a much-needed start-up mentality.
In addition to a few other acquisitions, Wal-Mart has taken a number of steps to better compete with Amazon. Jet.com and Wal-Mart are now offering free two-day shipping on orders over $ 35. The company is also testing a pilot program to get store staff to make last-mile deliveries. Wal-Mart also encourages online customers to collect in-store orders by offering discounts and using vending machines to deliver the purchases to customers.
If Wal-Mart wanted to increase its online sales, it was successful. In the first three quarters of 2017, sales in e-commerce increased by 69%, 67% and 50%, respectively, compared to the previous year. The company's approach is also to increase store sales, which increased 2.7% in the most recent quarter, while sales increased 4.2% year-over-year.
2017 was a memorable year for Wal-Mart. The company leverages its omnichannel capabilities, 5,400+ locations, and 1.5 million employees to do things only Wal-Mart can. Take this, Amazon!
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors.
The Motley Fool owns shares of and recommends Amazon. The Motley Fool recommends Costco Wholesale and Nordstrom.
This article was written in English by Danny Vena and on 01/19/2018 on Fool.com released. It has been translated so that our German readers can take part in the discussion.
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