Amazon's
Prime subscription service has grown to
about 100 million users. Why does it care about store fronts?
Amazon
has already opened storefront locations open in Seattle, San Diego, Portland,
Chicago, New Jersey, Walnut Creek, CA, San Jose, Bellevue, WA., Los Angeles,
New York, and Massachusetts. Amazon’s first NYC brick-and-mortar store to
open is in The Shops at Columbus Circle. The store is 4,000 sq ft, carrying
3,000 different titles on the shelves. All the books are presented face-out.
Each book is rated 4 stars or above on Amazon. The company also has the benefit
of arranging shelves with other data they collect, such as one titled
"Page Turners: Books Kindle Readers Finish in 3 Days or Less." There
is also a section to try out Amazon electronics.
Amazon
found success by competing against brick-and-mortar storefronts for an
online-based distribution model. So why is it now building physical stores?
Quite simply, Amazon's e-commerce platform is driving traffic to its
brick-and-mortar stores while at the same time its physical presence in its
stores bring more business to it’s e-commerce..
For
example, Women's apparel retailer Chico's
says selling its apparel on Amazon's platform is also driving
traffic to its brick-and-mortar stores. .Chico’s President and CEO Shelley
Broader said that the Amazon deal helps Chico's tap Prime subscribers for new sales.
Chico's has the option to expand the number of products and brands it sells on
the platform and to control marketing, pricing and promotions. "Customers
may have been introduced [to Chico's] through their Prime membership to Amazon,
but they can also return that item [or] seek additional matching items in our
boutiques," Broader said on MSNBC. "Finding alternative channels to introduce
our products to new customers is what 2018 is all about for us."
The
Amazon Effect
It’s
no secret that people are spending more and more time online. It’s also no
secret that much of that time is spent spending. The
Amazon effect describes the effect that the entire digital marketplace has had
on traditional forms of commerce, like brick-and-mortar retail. Namely, the
Amazon effect has introduced consumers to easy, fast shopping with
near-immediate results.
However,
the Amazon effect has also spilled over into more traditional spaces. Customers
now want the same experience, whether they’re in front of their computers or
inside a shopping mall.
How Retailers Can Counter The Amazon Effect
1.
Use brick-and-mortar to support online stores.
While
physical spaces still serve a purpose, many companies are rethinking what that
purpose is. One result has been new-age retail stores like Nordstrom Local, a
clothing store with no dedicated inventory. Customers can pick up their online
orders and make returns. There are onsite tailors. Nordstrom Local and stores
like it are designed to serve the online experience, not compete with it.
Another
company taking a similar approach is Rent the Runway, an online subscription
service that lends clothing to its customers. CEO Jennifer Hyman recently made
it clear at the NRF Big Show that its stores account for less than 10% of its
sales. Rather, they’re “supplemental to the customer experience.” These stores
are for customers who want in-person style tips and product advice from one of
their professional stylists. This kind of personal attention wouldn’t be
possible through a screen.
2.
Track customer behavior in store.
Everyone
knows that you can use analytics to improve your website, but these digital
tools are now increasingly effective in offline stores, too. These
analytics help better train their staff
to engage with customers, including offering them free samples as well as
improving the store layout.
3.
Leverage mobile technology in store.
A
recent study done by SOTI found that 92% of shoppers prefer stores that offer
mobile experiences, 73% want mPos for
quicker checkout times and yet 47%
expect personalized service.
To
accomplish these customer preferences, mobile and offline resources can work
together to accommodate shoppers who are becoming more independent. They
already know what they want when they enter a store. The retailer’s opportunity
is in providing a mobile experience that will make it as easy.
Rob Long
R Star News
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