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LAS VEGAS-“The tech titans are in many ways trying to disruptevery other company in our economy and are the ones to watch if youare a retailer.” So said Lori Schafer, executiveadvisor of retail at SAS Institute Inc. in Middletown, MA. The“titans” Schafer refers to are Google, Amazon, eBay, Facebook andApple—companies she says are the “internet challengers.” They arethe ones who have been throwing the “initial punches, a counterattack and perhaps more” and are the ones to keep an eye on,” shesaid.

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Schafer spoke on a panel titled “Clash of the Titans” at ICSC'sRECon 2013 event. Led by moderator Jeffrey Newman,senior partner and chair of the real estate department ofSills Cummis & Gross PC, the session discussedthe likely future scenarios between the internet and thebrick-and-mortar contestants and how the various participants willseek to enhance and grow their models through a combination ofvirtual and actual physical forays.

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“These companies are moving into retail, movies, television,financial services and will soon be going into healthcare andinsurance,” Schafer explained. “They are out to get their claws inevery industry.”

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The other tech companies, like Microsoft for example, “are bigtechnology companies, but they aren't the ones that invented wherethe future is going.” Every retailer, she says, needs to payattention to the titans.

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There are a lot of Wal-Mart watchers in the room, added Schafer,“but anyone who is watching Wal-Mart, better be an Amazon watcher.Amazon is redefining where we will be in 10 years.”

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According to Deborah Weinswig, managingdirector of Citigroup Inc. in New York, “there isa lot of change in what we are seeing in terms of howbrick-and-mortar retailers are interacting with the customer.”Current brick-and-mortar champions, like Wal-Mart, Target, HomeDepot and Costco for example, are really enhancing their offeringswith a variety of internet and social media initiatives, she says,in order to compete.

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But Weinswig warns that “if Amazon can get you what you want,where you want and how you want it in same day, it will become anissue for brick-and-mortar…it changes the way retailers shouldthink about physical retail.”

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To put some number behind it, Schafer points out that right now,Amazon is a $60-billion retailer. “In 2010 it was the10th largest retailer in the US. In 2011 it was the17th largest. In 2012, it broke the top 10. In late 2014and early 2015, Amazon is expected to reach $100 billion. And in2017, it will reach $200 billion,” she said.

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She added that Amazon is not just a retailer. “They only own 40%of their goods. They also are into business-to-business type retailwith amazonsupply.com, which sells everything from generators toair conditioners. They have set up their own studio in the UK sothey don't have to play as much with Hollywood. They are creatingtheir own movies etc. etc they have the kindle, the kindle fire,they have the amazon phone etc. that is just a few of the thingsthey are doing.”

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When asked what retailers could do to catch up, Weinswigstressed the importance of adapting. “JC Penney, for example, iswounded. They tried a lot of different things at the same timebecause they were aware that a lot of changes were happening in theindustry,” she said. “They tried to change their store, theirproduct and the way they interact with their customers, but itdidn't work all at once.”

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One retailer she said is doing it right is Macys. “Macy's hasbeen successful due to e-commerce sales. You can ship product outof stores, ship products to stores. They are making sure they arenimble.” However, Weinswig said that a retailer like Macy's needs ahealthy JC Penney because they need traffic into the malls.

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Brick-and-Mortar retailers are fighting back to change, saidpanelists. “They are alive and well and we are starting to seeretailers not only grow e-commerce but they are also growing squarefootage,” added Weinswig.

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Michelle Crames, VP of Social CommerceSolutions Revionics in Los Angeles, says that “No one canput their head in the sand anymore and say they aren't competingwith Amazon. So now it is about differentiating on theirstrength.”

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Crames says that “Understanding your customer and personalizedexperience is key. And then the next step is to use channels withsocial and mobile to amplify that.”

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In terms of who is in control—the retailer or the consumer,Crames saidthat the consumer is taking control. However, she saidthat “the amount of data that these companies have on consumers isalso helping control—that data also lets the companies dictate whatthe consumer wants before they know they want it.”

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GlobeSt.com is providing wall-to-wall coverageof ICSC's REConshow in Las Vegas May 19-22. RetailTicket will provide coverage of the event through the end of May,featuring pre-event articles, live video interviews on site andpost-conference analysis. Contact Scott Thompsonat [email protected] abouthow your firm can participate.

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Natalie Dolce

Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.