First published by the Drum on 15th October 2014
The news that Amazon is set to go physical this Christmas with the first bricks and mortar store in its 20-year history should be anything but a surprise. The category-leading retailer seems to have no fear when it comes to exploring the retail space, whether that’s by drone, digital or delivery van. Why not a physical store?
This year has seen a flurry of exciting innovations from the Seattle giant. In February, an update to its app called Flow introduced image recognition so products could be photographed and added to your shopping cart.
Then came Amazon dash in April, a Wi-Fi device combining voice recognition and barcode scanner to instantly add items to your Amazon Fresh shopping list. The retailer then added social to its own list of options with the buy button, social shopping cart link on Twitter.
Amazon continues to sell more products in more ways. It is the ultimate Everywhere, Instant and Personal retailer.
The Amazon store, in Downtown New York, is not primarily about sales. It’s a canny way of avoiding the logistical problem of ‘we called, you were out’ that can bedevil Christmas. This ‘conversion gap’ can also put consumers off at Christmas when it’s all about no fail shopping. It’s one reason why physical retail is still the largest element at Christmas. Who wouldn’t want a piece of that action?
The stores – and they will be multiple if New York is a success – are likely to be functional and more Argos than Apple as some commentators have suggested.
But is this anything more than a holiday gimmick? Seasonal stores have become a feature of a retail market in recent years, with no shortage of empty space and plenty of landlords willing to be flexible on short-term lets. Look at the boom in pop-ups in recent years. Is Amazon simply taking advantage of this to help it over a logistical hump?
The good news for customers is that the stores look likely to be putting customer service to the fore. This could be an interesting longer-term strategy for Amazon, which puts great store in its service offering. If returning goods to Amazon becomes as easy as doing so to M&S, that’s a great piece of service design.
This isn’t the first time Amazon has looked to get physical. It already has secure collection lockers in cities to make pick up easier. It has also used pop-ups to sell product and has sold Kindles through store groups Target and Walmart. It even looked to open stores in Seattle two years ago before going cold on the idea.
With the store development it will need to ensure that its famed slick online service is replicated in-store. The prospect of joining a queue to pick up Amazon deliveries could be more Royal Mail sorting office than titan of ecommerce. Same day delivery in New York or click and pick sounds great, but the experience needs to be Amazon-like.
Arguably Amazon is the most convenient retailer in the world: it delivers a huge assortment at highly competitive prices in a way that is simple to shop, and the more we shop, the more personal the experience becomes. We like that, but we don’t love it like we love other retailers. That is because other retailers, especially those that deliver an omnichannel experience like John Lewis, build emotion into everything they do, especially at Christmas.
Amazon isn’t scared of breaking boundaries and taking shopping everywhere. Perhaps the bricks-and-mortar format is an opportunity for Amazon to stand for more than convenience and price, and start to establish an emotional bond with shoppers at that most emotional (not to mention key trading) time of the year – Christmas.