Brick and mortar stores evolved with the advent of the internet, and now internet business models are moving into brick and mortar stores (like Amazon). Is this an evolution or a devolution? How do you see things developing in the future?
Internet has changed the whole game of business in every industries imaginable. What was once a store that we can walk in is now a store that we can click. Or the combination of both. E-commerce and click and mortar businesses have been popping out like an epidemic, changing the course on how customers spend their money. And where.
Opening up an e-commerce store is as easy as searching an article about Trump. It is a game changer; lower cost, diminish the boundaries of time and location, better information and communication, better reach to the targeted market, better customer service, you name it. Cost, among other advantages, is definitely the number one factor why people are running towards e-commerce and/ expand their brick and mortar business to a click and mortar one. Then Amazon Go happens.
As Wikipedia refers, Amazon Go is a grocery store operated by the online retailer Amazon, with currently one location in Seattle, Washington. It is partially-automated, with customers able to purchase products without using a cashier or checkout station. Which could only mean one thing : no line. A dream for every shopper. It is not only that the e-commerce giant is now touching base with the click and mortar idea, they make it so shopisticated it makes every retailers in the world go berserk. VP of Amazon Go, Gianna Puerini, said how easy it is to shop there. Just sign in with the Amazon Go app when you enter the store and shop as you normally would. The app keeps track of what you pick up and put back on the shelves, and charges you for your final items when you leave through sensing gates. Although some errors did happen, like a “stolen” yogurt which happened couple weeks ago.
Now coming back to the question : why? Why would Amazon open a physical store? I could only think of several obvious reasons :
1. To promote their kindle. It is the only way to showcase their gadget, live, where people could touch and feel their product. To try and learn how to use it before they buy it. And of course, to capture new customers who maybe never thought on buying one until they came to the store.
2. Prime, upgraded. Amazon Prime is their biggest revenue stream, but in their mind : what if we can capture the same market, the same revenue, but with less work? The answer is : make the customers buy the products online and pick them up by themselves at the store.
3. To try the game of impulse buying. They will never know that their regular customer who always buys toilet paper online might want to try buying them in stores and ended up buying bunch of other stuffs too.
4. To capture loyalty of existing customer, especially Prime Students with their Amazon Books store.
5. To create brand awareness, positioning, buzz. You all know how online community reacted on their ridiculous long line at their Seattle’s store. Which is kind of ironic, because the main purpose of the store is to have no line. But hey, it gets the community excited. So it works.
As you can see, all five of them fall into one umbrella : marketing. Which of course will derive sales, but that’s not the point here. It is neither evolution or devolution. It’s just another innovation for marketing. Which I can say has happened for quite some time. The most popular one is pop-up shop. One example being Kylie Jenner’s 400-million dollars cosmetics empire which exists only on the internet. Yeah, they have opened pop-up shop just in time before their newest launch. What for? Marketing. Do you ever heard of Gymshark? The UK based athleisure company which call their brand ambassadors “athletes” did a pop-up shop in LA, selling exclusively products that had not been released on their e-commerce store. What for? Marketing.
See? Buzzwords. Product awareness. Launch awareness. Trend.
This is not a new thing, yet it is spreading. Who knows what future may have in store for us (pun intended). Maybe Bezos finally grows out a single thin hair because he has been thinking hard of what other markets to capture and how to reach them. Or should we help him?