Guardian reported today that Amzaon has just opened a bookstore in Seattle's University Village stocked with 6,000 books at the same price as Amazon sells them online.
It seems like a logical fit for Amazon, to sell books at a physical location (thereby replacing many of the very bookstores its website put out of business).
Online ordering has become a major part of a consumer's shopping experience, but in spite of e-commerce growth, most people prefer the in-store experience. There is value in being able to pick up a product and view it in real life rather than just through images, especially when purchasing a product you don’t know anything about or haven’t seen in person before.
For Amazon, physical stores mean a more tangible brand experience and a place to pick up online purchases or make returns/exchanges.
A physical store location also provides an easy access point for returns and exchanges and is another opportunity to display the brand of the company. The in-store experience can play a vital part in establishing a company’s brand from the immersive experience of the store environment to interactions with sales staff. In the case of Amazon, a physical location could also act as a fulfillment center and provide a space for product pick up.
This is sort of coming full circle for the company, as Amazon started out selling books online. But books are just one of the many verticals that Amazon could tackle with a physical store location, with their online product selection they could easily offer a variety of products in store as well. Since Amazon already has access to a wealth of data in regards to product ratings and reviews, upsells and cross sells and where different products are being shipped to, they have a good start at being able to predict that product mix would be best served in different locations.
Amazon is also at an advantage in that it has a wealth of (online) consumer data to inform what they stock in-store and where.
Take-home message: It seems as though Amazon understands the importance of a physical space as part of a consumer’s shopping experience. Opening up a retail location will provide them more brand exposure and a new way of interacting with their customer base.
If in-store pricing remains competitive and if the retail location is able to offer a seamless experience with online ordering, pick-ups and exchanges, I think this venture will succeed. Amazon has access to a lot of sales data and a large online user base already, which gives them a leg up in targeting consumers and deploying their product mix. Now they just need to create a great in-store experience for all their offline customers.