Throughout 2017, Walmart and Amazon took their positions and mustered their troops for battle. Both started to add elements that made up for their respective weaknesses.

Amazon added brick and mortar aspects to their business through their launches of bookstores, their experimental Amazon Go store, and their purchase of Whole Foods. On the flip side, Walmart’s purchase of Jet.com was followed up with their acquisition of a number of other strong e-commerce and direct-to-consumer brands such as Bonobos and Moosejaw to muscle up their digital game.

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For 2018, expect more of the same from these two goliaths. Walmart has yet to fully implement its Jet.com strategy from the looks of things but that should formalize quickly as they address the younger digital audience. They have also increased their order online and pick up at the store service presence which will continue to expand. This will be especially important as groceries are seen as a battleground in light of Amazon’s Whole Foods purchase. There should also be a few surprises out there potentially coming from Walmart’s partnership with Google to directly go against Amazon’s Alexa.

For Amazon, everyone wants to know when they take that next big step into brick and mortar.

2017 was an odd blend of moving forward and slightly back for Amazon. They pulled back markets for AmazonFresh while making a big step forward with Whole Foods. That being said, other than some potential discounting and some stocked Alexa devices in store we haven’t seen this strategy fulfilled. Amazon continues to pick out new competitors, whether it is healthcare with the purchase of Aetna, AWS and all of their AI solutions, or even taking on FedEx and UPS with their own delivery development.

The big question is when are they going to create a stronger tie to the day-to-day customer at the brick and mortar level—and a deeper question is do they even need to? Look for 2018 to be when Amazon seeks to answer that question with a big acquisition.

The important question that isn’t asked often when discussing these two giants is this:

What are all the other retailers going to focus on in 2018 to combat these two juggernauts?

Well, there is a culmination of things that is coalescing under one term: individualization or 1-1.

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For years, retail brands have talked about “customer-centric” and “omnichannel marketing.” In truth, this is all code speak for engaging customers as individuals instead of generically or as broad marketing segments.

Omni-channel is about the retail brand having a unified or singular common experience for the individual customer whether they are on their smartphone or in the store. Customer-centric is about thinking of the customer experience first and not what the brand wants to broadcast.

This applies to the emails customers receive, the online store experience, as well as the brick and mortar experience. While it has been discussed for several years, retailers are now realizing that this is imperative for their business. They need to take advantage of the unique relationships they’ve developed between their brand and their customers, and take it to a very personal level.

The customers are now aware of generic emails and the online experience being completely disjointed from the physical store experience. They want to feel like they are appreciated and treated in a way that understands their interests and preferences.

While this sounds like an expensive line item for customer satisfaction, retail brands are quickly realizing that not only should they do this to be a contemporary brand, but there is also good profitable reasons to do so.

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This is the shift that has occurred over the last 12 – 24 months for the retail community. They are seeing certain brands drive higher profitability from their personalization results. This is a result of what you logically expect from improving the customer experience.

Customers shopping can find what they are looking for much faster because the e-commerce site pivots around their preferences and intent. Emails have merchandise or discounts that are targeted at individual users and generate improved email response metrics. Store associates are armed with tablets that help them improve suggestions to shoppers, make it easy to restock out-of-inventory goods by simply ordering right on the device.

Collectively, these pieces create a smoother customer journey and prove to the customer that their favorite brands understand how all of their touchpoints work together.

The other driver of this individual customer approach is technology. The advent of AWS, Hadoop, and machine learning and AI, have taken these concepts from the world of tomorrow to an actual experience that can be created today. Retailers are realizing that while Amazon and Walmart battle it out to be a universal shopping brand they have an opportunity to sneak in and start owning their customers in a whole new way. 2018 is going to be a great year to watch unfold.

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