“All roads indeed lead to Rome, but theirs also is a more mystical destination, some bourne of which no traveller knows the name, some city, they all seem to hint, even more eternal.” – Richard Le Gallienne
Are we witnessing the rise and decline of the pureplay online retailer? Is the much discussed revolution in retail ultimately progressing back to what it always was for ‘fit’ retail businesses?
Focusing on a full service-led business to consumers engaging the five senses, combined with personalisation and strong delivery.
Even the most justifiably lauded retailer globally, recognises that growth for an online retailer can only be achieved by serving 10-15 per cent of the population.
This 10-15 per cent then grows either through acquisition or to build an integrated offer that meets the other 90 per cent.
So today we see that Amazon is creating physical Amazon retail shops to meet that larger population needs. The growth of Amazon in moving to physical retail is really approaching omnichannel via the side door.
It’s a side door that will be increasingly opened and is being opened by pureplay online retailers, from the likes of Google to Microsoft, all with an understanding that to successfully build brand, retailers need to have a physical presence.
Interestingly, I came across an interesting article today by Glenn Shoosmith of The Guardian, which highlighted that like “many online-only operations, Amazon’s culture and success is built around using data to convert customers as efficiently as possible. However, applied to the high street, this approach ignores a simple point: people shop online to save time and money. They shop offline to spend time and money.”
Is the store experience that Amazon plans to provide, an experience that’s worth customers spending their time on?
As an entry point being the Amazon book store, Amazon believes the data insights it has developed from selling books online can help the retailer avoid stocking titles that will sit on the shelf collecting dust. Prices at Amazon Books will be the same as those online. Books will face forward and under each will be a card that provides its Amazon.com rating along with a review. Being Amazon, customers have the option of buying a book in the store and leaving with it or ordering it online and having it shipped.
This all seems great in terms of inventory management for Amazon, and convenience for the customer, but where’s the engagement and added value that should come from a store experience and ultimately build on the customer’s relationship with the brand?
This engagement offering (or lack of) also highlights a gap in Amazon’s data capture strategy when moving into brick and mortar. As Shoosmith highlighted; online “Amazon understands more about your shopping habits than you probably know yourself.” Yet in store, without cookies and ad tracking, Amazon don’t seem to have a naturally integrated data capture structure to build upon their current customer knowledge from the online realm.
Having a physical offline store, opens up many possibilities for a pure play online retailer. For offline retailers, offering services by appointment or engaging the customer through instore events “means they get to ask all sorts of relevant questions, and they go far deeper than simple age, gender and geography.” Additionally, this is data that customers explicitly provide and immediately receive value from, therefore it is a win-win situation for all involved.
Ironically to compete with the boom in online retail, many traditional book stores have built communities, hosted events and created strong relationships with their databases.
It is questionable now who should be taking a leaf out of whose book when it comes to ‘fit’ retailing.
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First published on Inside Retail, 18th November 2015.