• by Sarah Mahoney  @mahoney_sarah, July 7, 2017

Walmart is expanding its test of giant vending machines for online grocery orders. Target is upending its private-label clothing strategy. And JC Penney, Kohl’s, Newegg and Walmart are all staging sales events to blunt the impact of Amazon Prime Day.

It’s all further evidence that retailers are racing as fast as they can to stay relevant against an intensified online onslaught, confirmed by the latest research from BDO.

The report, based on risk factors cited by the 100 largest publicly held retailers in recent Securities & Exchange Commission filings, says that 99% of these store chains say industry competition and consolidation is a threat. Chief among those concerns is the realization that “right sizing” the number of physical stores they operate is imperative, which has led to the recent closure of thousands of stores as well as steep reductions in head counts. Some 69% mention the risks of owning and leasing real estate, for example, and 44% name mall traffic and competition for prime real estate as a significant risk.

Effective marketing is also a top concern, with BDO reporting that 83% of the retailers are worried about marketing, advertising, promotions and public relations, an increase from 66% last year. And 65% say impediments to their e-commerce initiatives are a concern, up from 57% last year.

“Retailers’ top risks show their eyes are wide open to the new wave of emerging and evolving risks, from widespread store closures and bankruptcies to uncertain regulatory changes and mass digital disruption and its associated security threats,” says Jennifer Valdivia, a partner in BDO’s Consumer Business practice, in its report. “While awareness is a key first step, retailers’ proactive responses to these vulnerabilities will ultimately determine their fate.” 

Walmart is one of those rapid responders these days -- stepping up its offense against Amazon and other internet players and expanding its test of Pickup Towers to new markets. Described as “giant vending machines,” the massive towers are refrigerated for food orders and allow consumers to enter and use a mobile barcode to retrieve their online orders in less than a minute. 

The Bentonville, Arkansas-based retailer already offers drive-through grocery pickup in more than 600 locations and says it intends to expand it to another 500 this year, and it also offers a small discount on items ordered online and retrieved in stores.

Many of its innovations are digital improvements aimed at making in-store shopping less aggravating. It recently announced tests in its “Next Gen” stores that include WiFi-connected call buttons, for instance, that notify sales associates’ wearables that a customer needs help. A Scan & Go test lets shoppers scan items at checkout, either with their own phones or a store device, rather than use its less-forgiving self-checkout technology. And it has set up digital ordering in the deli department, so people can place an order and keep shopping until the order is ready. (If successful, Walmart says it envisions expanding it to pharmacy, auto care and beauty salons.)

And Target, in announcing four new apparel brands it says offer a “new, fresh interpretation of the Tar-zhay that we know our guests love,” promises that reimagining stores and enhancing digital will meet its customers’ changing needs in a big enough way that people will “start to feel a real difference.”