Amazon Affiliate Marketing

What Amazon’s Investment in Brick-and-Mortar Means for Retailers

Building Sustainable B2C Retail Success in the Age of Amazon
Written by publishing team

Amazon.com’s recent investment in brick-and-mortar stores comes at an unusual time. Over the past 18 months, most retailers have focused on shifting their business from in-person to online. The recent boom in e-commerce, which has accelerated online shopping trends from three to five years, is making the recent investment in Amazon look a little unusual.

However, there has already been an astonishing amount of brick-and-mortar innovation during the pandemic. Google opened its first retail store; Saks Fifth Avenue and WeWork have teamed up to offer co-working spaces in supermarkets. original digital brands such as Glossier opened or revamped their physical locations; Best Buy and Best Buy have announced plans for a demo store dedicated to gaming, headphones, and fitness — with a larger-than-average Geek Squad. These brands understand that consumers love a personalized shopping experience and want to touch or see products before buying.

So is brick and mortar here to say? Yes and no.

Despite the pandemic, this is a good time for some retailers to invest strategically in brick-and-mortar stores. Low interest rates and optimistic investors have made commercial real estate cheaper than pre-pandemic levels. Many stores and malls are closed, although this does not mean that they are not looking for new business models. Retailers need to know how to give their customers more ‘push for money’ when they visit the store. The Saks-WeWork partnership, for example, means that people will be able to work and shop in one outing.

This does not mean that traditional stores will be the primary channel. For Amazon and other retailers, physical stores will form part of a larger omnichannel strategy that includes a hybrid of in-person and online shopping. Leveraging personal shopping experiences to sell soft goods, for example, will enable Amazon customers to spend more money with the e-commerce giant. This paves the way for great integration with current fashion innovations such as locker rentals, personal shoppers, and other retail innovations.

What do Amazon Stores mean for other retailers?

Today’s shoppers are fiddling with devices and moving between channels, in person and online. Consumers use their phones in stores to accomplish tasks such as comparing prices or checking inventory at another location.

For other retailers, this means making traditional stores part of the digital experience and investing in omnichannel digital experiences. Here’s how retailers can follow in Amazon’s footsteps:

  1. Building visibility between digital and in-store experiences. Developing a seamless experience across physical stores and digital channels will be more important than ever. E-commerce websites are the new storefronts, but that doesn’t mean that retailers should give up the personal shopping experience.
  2. Discover ways to create an omnichannel experience. Offering unique in-store experiences that bring the world of technology and digital projects to life in a physical environment can help retailers stay relevant. Nike’s new “Rise” store is a prime example of this. The shoe company has launched a new store in Seoul, Korea that allows customers to use their phones as part of a “high-tech” shopping experience.
  3. Focus on the foundational elements. Improving everyday shopping experiences such as returning items, trying clothes, and testing furniture will help retailers build trust with their customers. Amazon uses traditional stores to display clothing and home, known as “light goods.” With clothing and furniture, consumers tend to pay attention to the touch and feel of the product, which means trying or testing items. Ikea has responded to this need by inviting customers to “hang out” in rooms so they can experience the furniture in a “real-life” scenario.

Elisa Quinnby is Senior Director of Retail Insights at Quantum Metric, an ongoing product design platform that helps organizations build better products faster.

About the author

publishing team