It is no secret that the retail and shopping environment is in the midst of a major evolution. The way consumers discover, purchase, and expect goods and services to be rendered is changing quickly, and retailers must adapt to stay relevant. As an associate analyst here at gap intelligence, my role includes monitoring and reporting on the retail environment as it reacts to the growing number of challenges posed primarily by the world of e-commerce.

Amazon, aptly referred to as the retail killer, is an ecommerce giant that has captivated our culture and is raising the standards that consumers expect from their shopping experience. Amazon has acustomed shoppers to a personalized shopping environment, expert fulfillment methods, and superior customer service. The competitive pricing and convenience that Amazon provides to its customers is resulting in share gains and is forcing retail competitors to adapt in a number of ways that includes reinventing retail floor plans, offering price match guarantees, and shifting to a subscription based services to stay afloat.

Amazon Pop Up

Retail Space Gets More Productive

One way that retailers are hoping to drive more customer foot traffic back into brick-and-mortar stores is by reallocating less productive retail space as collaborative workspaces, social experiences, and interactive activities. For example, Apple has redesigned its flagship location to offer customers a conference room where small businesses and startups can receive advice from app developers, a forum for creative local artists, and a hallway of screens designed to cycle through seasons with interactive iOS themes. Staples has partnered with Workbar, a co-working space company, to offer its customers workspaces, conference rooms, private phone rooms, secure WiFi printers, and bottomless coffee or tea within select Staples locations. Similarly, Best Buy has resigned its floor space to give consumers the ability to walk through its home appliance offerings, and has placed an experiential shopping section or “shop-in-shop” for users to manipulate new consumer electronics products.

Photograph of Samsungs Shop in Shop Stores

Retailers Get Competitive with Ongoing Price Matching Guarantees

The majority of mass merchants have launched price match guarantee programs to entice consumers back into stores. Price matching allows consumers to take pricing from local competitors, including online pricing, and the retailer will lower its in-store price to compete. These types of programs compete directly with Amazon’s pricing, and can be viewed by customers as a way to avoid the cost of shipping and membership fees associated with some e-commerce purchasing (such as Amazon Prime and Google Express).

Don’t Be Like Blockbuster

Dollar Shave Club, Netflix, and Dropbox have all secured their positions as household names and each gained a loyal customer base. The success of these businesses lies in the subscription sales model each company chooses to provide to consumers in an era where convenience is king. A subscription based business model allows consumers to pay considerably less for a product up-front, lock into a predictable flat-rate, and enjoy automatic order fulfillment, all while indulging in the good or service right off the bat. Businesses also benefit from customers purchasing on subscription, as they can more readily manage inventory, lower pricing, and determine revenues. Perhaps most importantly, subscription-based services have the ability to build and maintain brand loyalty between consumer and business from a month-to-month basis. 

With the internet of things (IoT) on the rise, and a growing trend towards connected living, a subscription based service is an easy model to see expanding in the future. Retailers will need a way to compete with success and wide-adaptation of products like the Amazon Dash, Amazon Echo, and Amazon Prime services that allow members to order goods and services without lifting a finger. 


Although the wide-spread adoption of ecommerce has redesigned the in-store shopping experience, research for consumer shopping habits continues to show that having a touch point from brand to consumer is an advantage. E-commerce focused resellers such as Amazon, QVC, and HSN are moving into intimate brick-and-mortar stores, posing further challenges to traditional brick-and-mortar retailers.  

Now that the lines between e-commerce and traditional retail stores have blended closer to a brick-and-click environment, the presence of retail is accessible at the click of a button.  The mobile storefront experience is now more important than the physical retail store experience.  Applications along and mobile reformatted websites need to be intuitive, clean, and easy to maneuver. A positive mobile storefront experience will drive more physical foot traffic into stores, and capture more sales overall.

Photograph of Amazon Book Store

Sink or Swim

The retail business model is evolving, and retailers will need to get creative and embrace the change in order to stay relevant. If retailers cannot create alluring ways to attract consumers back into their stores, more retailers will be forced to close their doors. Many retailers have already introduced major changes to their store footprints, and less fortunate chains such as, Sports Authority and Tiger Direct have closed their retail operations entirely. In order to stay relevant retailers will need to redefine how it communicates with its customers. With digital purchasing on the rise, retailers will need to revamp their in-store offerings, launch and maintain an online presence, develop an easy to maneuver mobile application, and subscription based services wherever possible. With the saturation of both retail and mobile experiences, brands are going to need to come up with new ways to impress and leave lasting impressions on a culture of savvy consumers.