We've been hearing a lot in the last few months about the retail apocalypse and how retailers who don't adapt to the changing paradigm will perish. I won't dwell on what that situation is, or isn't -- my colleagues have already covered that in detail. Instead, I thought it would be more beneficial to focus on identifying several companies that are positioning themselves for the future.
There's no question that e-commerce or an omnichannel strategy have become essential for companies in order for them to compete going forward. Amazon.com (NASDAQ: AMZN) has clearly demonstrated that e-commerce is the future, and at this point, there's no turning back.
Each of these companies is taking a different approach to the e-commerce revolution. Read on to find out why I believe Nordstrom (NYSE: JWN), Costco Wholesale Corporation (NASDAQ: COST), and Wal-Mart Stores (NYSE: WMT), might be among the best positioned to compete in the era of Amazon.
Nordstrom is testing concept stores focused on services. Image source: Nordstrom.
Adapting to change
Nordstrom is representative of the paradox retailers face -- increasing their online sales while adapting its physical stores to accommodate those who still prefer to shop the old-fashioned way. The company is taking a unique approach that may just be the future of brick-and-mortar retail.
Late last year, the company announced the debut of its concept retail store. Dubbed Nordstrom Local, the location will be only 3,000 square feet -- significantly smaller than the average store, which tops in at about 140,000 square feet. The concept store will focus on service more than shopping, with personal stylists to offer fashion tips, in-store pickup for items ordered online, as well as beer, wine, and cold-pressed juices. Locations will also offer onsite alterations and tailoring, curbside pickup, and same-day delivery.
For the nine months ended October 28, Nordstrom reported that online sales from Nordstrom.com increased 14% over the prior-year period, while those from Nordstrom Rack HauteLook jumped 26%. Those gains weren't quite enough to make up for weaker in-store sales, but the numbers are encouraging.
While it remains to be seen if its Local concept stores will ultimately be successful, the company's willingness to innovate will serve Nordstrom well in a future dominated by e-commerce.
Costco's e-commerce sales are ramping up. Image courtesy of Costco Wholesale.
A variety of approaches
In its fiscal 2018 first quarter (which ended November 26, 2017) Costco reported comparable-store sales that jumped 8.7% in its U.S. market and 8.2% in its international market, both over the prior-year quarter (excluding foreign currency and fuel price changes). That resulted in comps that grew 7.9% overall. Traffic at the company's warehouse stores grew by 5.9% worldwide and 6.6% in the U.S.