Business

Amazon’s sale shows how tech gives traditional retail a run for its money

In this Dec. 1, 2014 photo, Teresa Clark fills an order at the Amazon fulfillment center on Cyber Monday, in Lebanon, Tenn.
In this Dec. 1, 2014 photo, Teresa Clark fills an order at the Amazon fulfillment center on Cyber Monday, in Lebanon, Tenn. AP

Amazon is holding a 20th anniversary sale Wednesday that it says will feature more specials than Black Friday. For brick-and-mortar stores, the promotion is one more way the tech giant is raising the bar in the already fiercely competitive retail space.

As an answer to Amazon’s one-day sale, big national retailers such as Wal-Mart and Best Buy are offering online specials of their own.

The rise of online shopping is forcing retailers everywhere to be inventive on multiple fronts – investing in their Web presence while also updating their brick-and-mortar stores. Charlotte-based Belk, for example, has spent millions in recent years on store remodels as well as e-commerce. The renovations announced last month at SouthPark Mall are designed to enhance the shopping “experience,” mall officials say.

“Retailers are looking for creative ways to get in front of budget-conscious shoppers this summer and offer them a unique experience that their competitors may not be offering,” said Kathy Grannis Allen, spokeswoman for the National Retail Federation.

That’s especially true in today’s tepid spending environment, Grannis added. The Commerce Department reported Tuesday that retail spending fell 0.3 percent in June after a robust jump in May, a sign consumers remain wary six years after the official end of the Great Recession.

Amazon’s sale Wednesday is just for Prime members, who pay $99 a year to get free two-day shipping on Amazon.com orders, among other perks. The Seattle-based mega-retailer doesn’t offer same-day delivery in Charlotte yet, but it’s been hiring at its Concord distribution center in recent months as part of a company-wide effort to quicken delivery times. The Concord center employed about 360 as of June.

Wal-Mart, the world’s largest retailer, also said it will offer specials Wednesday including free shipping on all orders over $35 (normally the special applies only to orders over $50.) Similarly, Best Buy boasted that its “Tuesday Techday” sale required no membership and offered free two-day shipping. And Target held a “Black Friday in July” sale on its website this month that offered deals on thousands of items.

E-commerce accounts for a little less than 7 percent of total retail sales, government figures show, though that figure has doubled over the last decade.

To take advantage, brick-and-mortar retailers like Belk have invested heavily in “omnichannel” capabilities, which refers to the multiple places (online and in store, for example) to interact with customers.

Belk has also worked to improve its web capabilities after arriving relatively late to the online shopping scene: Until late 2008, the company’s website offered only gift cards, registries and a small selection of home goods.

Earlier this year, Belk said it has invested over $600 million over the last three years in “key strategic initiatives” that include store openings and remodels, along with strengthening omnichannel, investing in its supply chain, improving customer service, hiring dozens of tech workers and overhauling its website and IT systems.

Retailers also stay competitive by updating their facilities to offer the best possible experience they can for consumers who are already inundated with other shopping options.

“Brick-and-mortar stores have to have some kind of differential advantage because they’re always going to have higher prices,” said Steven Cox, a marketing professor with Queens University of Charlotte. “You can’t afford, as a major retailer, not to have a top-of-the-line environment for people to shop in.”

SouthPark Mall, for instance, just announced it will undergo its first major renovation in more than a decade. Upgrades will be to its interior and exterior and include new furniture, new signage and fountain improvements.

Earlier this spring, the Ballantyne Village shopping center completed a $500,000 renovation that included a major new plaza. Under its new owners, it has plans for other major changes, too, including adding new tenants.

“The shopping experience involves all the senses that help make it fun and exciting. Shopping on the internet is more about procuring things than it is about shopping,” Village general manager Ed Camp said.

And others seek to stay competitive by touting lower prices.

Charlotte Premium Outlets, the area’s first mall to open in almost 10 years, for example, boasts 100 outlet stores and savings of 25 to 65 percent on merchandise. It is getting ready to ring in its one-year anniversary later this month.

Katherine Peralta: 704-358-5079, @katieperalta

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