Oh Amazon, is there anything you won’t do?
If you thought the answer to this question was “open a physical retail store and dance on the graves of the smited fallen chains and independents it helped bury because that would be too ironic” well you’d be wrong.
On Tuesday 10 November, the company that brought you the Kindle, Amazon Fresh, Amazon Prime and many other services that mean you never have to leave the house again, will open its first ever bricks and mortar bookstore in University Village, Seattle.
Much of this news has already been reported on much more sycophantically or sarcastically elsewhere, so I’ll break down the facts for you and try to even-handedly pin down what it all means in the grand scheme of things (relatively speaking) as much as I can.
- The store will only stock books. For now.
- Oh and Kindles, Fire tablets and Fire TV streaming-media devices, but that’s it. Just those and books. No blu-rays, shampoo or fancy dress costumes. For now.
- The store won’t be somewhere you can pick up your Amazon orders from, in what can only be described as a slap in the face for multichannel customer service.
- It’s in Seattle so the chances of any of us here on the writing team being allowed to visit are between zero and a fraction above zero.
- Amazon has promised that books will be retailing at the same price as they do online. Let’s see how long it can keep that going once it opens more branches and its overheads increase exponentially.
- The shop contains 5,500 square feet of retail space and 2,000 square feet of storage. This fact is purely for those of you out there who, unlike me, can visualise large spaces without a photograph. For all I know, that’s the size of a football pitch.
- According to Seattle Times, Amazon ‘reached out’ to sales staff at local stores to work at the new store. It wound up hiring 15 employees, including librarians and retail clerks. You may read ‘reached out’ as poached if you like, but that’s your own opinion and not one of ClickZ and its subsidiaries.
- Amazon will also be able to use the power of social proof with its access to millions of genuine customer reviews, which it can now use in-store. I can’t wait to see Jane Austen’s Emma with this little missive pinned underneath…
- In a major differentiator from other bookstores, every book will be faced out rather than in a row with their spines showing. Those rebellious punks! Apparently this is to show off authors and their work in a much clearer way, emulating the way you see a product on the website. Now as someone that spent half a decade working in a bookstore, I know they’ll give this up as soon as they realise how many books get ruined by doing this.
- The other angle in the above point is the store won’t be able to stock as many books as other bookstores, but then again it doesn’t need to. Thus bringing neatly to our next section…
Why might this actually be quite good… no hang on, bear with me…
Data is naturally at the heart of everything Amazon does, and the company will of course use this vast reservoir of knowledge to stock its shelves, picking titles that it already knows sell incredibly well in the local area.
Amazon knows the habits and behaviours of its customers, and can therefore offer an entirely localised experience that would be different from one that exists in an Amazon bookstore a few miles down the road.
Amazon has also promised that it will not only use this data to stock the shelves with best-selling books but also with lower selling books that have higher ratings from customers.
Perhaps the problem of having piles of unsold books will be a thing of the past, perhaps with the use of beacon technology and existing customer profiles Amazon can offer an entirely personalised and relevant service, perhaps this will be the perfect example of a multichannel retailer being able to truly join up the dots between the online and in-store retail experience, perhaps with your existing account details and the popularity of mobile payments you won’t even need to queue up at a till and interact with another human being ever again.
Holy crap, I think I’ve just persuaded myself that this is a brilliant idea. Oh no!
But surely all of this seems like a massive hypocrisy? The high street is dying, why would Amazon even entertain opening a retail store? Unless… this was its plan all along, to eradicate all existing independents and chains using lower prices and increasingly convenient delivery options, purely so it can then eventually stake its claim on the high street.
That would be the most logical conclusion drawn if this were a couple of years ago, but maybe now things aren’t quite the same anymore.
A study from Kantar Worldpanel suggests that high street entertainment retailers are now turning things around.
For the 12 weeks to 27 September 2015, HMV, GAME and Argos all increased their year-on-year share. HMV was the strongest performer, narrowing the gap with Amazon by 2.5 percentage points.
The past quarter saw 68.4% of all physical entertainment sales come through the high street – up from 64.6% last year and the highest since May 2014. High street spending on games also grew by 7% in the past quarter.
These figures are just for the UK and only for the last quarter, so it’s obviously very early to tell what the future of the high street looks, especially with Black Friday just around the corner where ecommerce retailers are likely to gain their lost ground. But there is hope for the high street, and that’s what’s important, and perhaps this is why Amazon feels threatened enough to come offline.
The important thing for existing multichannel retailers is that in order to stop Amazon from steamrollering all over them in the physical world, they’d better up there game when it comes to using data and delivering excellent customer service and quick.