The path to purchase for today's consumers is constantly evolving.
As consumers cross between physical stores, laptops, and mobile devices, retailers are tirelessly crafting new seamless experiences that utilize all these channels.
In 2015, Amazon opened their first Amazon Books store. Now in 2019, they have 17 Amazon Books locations and have created other types of stores, too. Some of Amazon's newest additions include Amazon 4-Star, Amazon Pop-Up, and Amazon Books.
Physical retailers are warily looking at Amazon’s aggressive move with trepidation. While physical retailers are absolutely justified in their reactions, here are some key lessons they can gain from Amazon’s (and other online retailers) expansion.
1. Use customer data
Amazon Books chooses store inventory by using data collected from both customer purchases and customer ratings. While most retailers use sales history on their inventory choices, few organizations use customer ratings when choosing inventory. Look for Whole Foods to follow suit.
2. Make it convenient for the customer
The first thing you notice when you walk into Amazon Books is that all the books are displayed with their covers facing the customer, as opposed to the traditional spine-out presentation of most bookstores. This means that while stores display less inventory, it makes for a better customer experience overall and less head tilting to read the titles.
3. Maximize the customer relationship
Amazon cares about deepening their relationship with their customers. Book prices are lower for Amazon Prime members than non-members, which drives new Amazon Prime memberships and reaffirms the value of the membership for its existing members.
4. Leverage the physical advantages
Amazon understands that online shopping can be limiting. Though you can see the products, you usually can’t touch, hear, or smell them. Amazon Books is set up like an intimate showroom, inviting you to interact with the products. Too many physical store retailers have all their products in boxes, which tends to limit sales and increase returns.
5. Don’t overwhelm the audience
The typical Amazon Books location carries about 5 times less inventory than the typical bookstore. So while they might not have the book you want, it's easy enough to order it online.
Having every title in stock is not the goal for Amazon Books. The goal is to delight the visitor.
6. Introduce hybrid services
Best Buy, Sears, Macy’s, and Walmart have introduced hybrid services, such as “buy online, pickup in store”(BOPIS). This offering merges the convenience of online and offline shopping with scheduled product pickups.
Meanwhile, online retailers like Warby Parker and Bonobos now have a large network of physical stores. Although shoppers can try products on at the store, they do not maintain an inventory, so all orders are shipped out from a central location.
Amazon Books is a great example of maximizing the customer experience. They could have opened a massive bookstore, but they instead chose to open a smaller, intimate shop that caters to the needs of the customer rather than the needs of the retailer.
While these online retailers will continue to grow, physical retailers should remember that most customers like to walk in, pick out the product, and walk out. This argument is proven by data – 90% of all retail sales in the U.S. are represented by brick-and-mortar locations.
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