Under the spotlight: Amazon takes up residence on main street

Facebooktwittergoogle_plusredditpinterestlinkedinmailFacebooktwittergoogle_plusredditpinterestlinkedinmail

Andy Morris, head of retail at the Egremont Group, reports on his visit to the Chicago Amazon store

Morris: Amazon Chicago is retail masterclass

In the week that saw Amazon profits fall due to overseas expansion, founder Jeff Bezos said: “Our teams remain heads-down and focused on customers.” This is no glib soundbite, in fact this razor sharp customer focus is being acted out right in the heart of main street as Amazon reclaims the local bookstore.

Wandering into the new Amazon store front in my local neighborhood in Chicago was like experiencing a real time retail masterclass. Working with some of the largest retailers in the world during the course of my career has led to a certain healthy cynicism when embracing a new format so I was not prepared to be so completely won over.

As a book lover, I’ve already held an Amazon account for decades and have signed up for Prime Membership – it knows me, it knows what I like and in my new local store it has stocked up with everything I want to buy.

Making good use of its huge data bank, Amazon has been brave about the number of SKUs in the store. Data gleaned from its online store allows it to to understand what’s ‘hot’ in Chicago and using this knowledge it has stocked its store using only those products. It was like walking into my own personal wish-list.

Looking around the shelves I was immediately struck by how each book is presented. Merchandising is all about impact after all and we really do like to judge a book by its cover. So unlike other book stores, all books are merchandised ‘front facing’ so we can see the cover of every book. This simple change is an enticing way to display the products, it draws you in and engages you more. There are no prices on the shelves either, customers are required to scan the shelf edge bar codes for the prices of products. As Costco and Sam’s Club are also finding out in this modern retail age, there is value in membership for both retailers and customer alike.

It doesn’t end there. We visited as a family and my kids were completely occupied in the kids section. Great books helped but the ‘kid ready’ Amazon Fire tablets had them engaged and engrossed for a good hour. I was free to shop and drink coffee in their coffee shop. This mix of tradition books and technology is evident throughout, I was shopping for books but ended up leaving with an Echo.

When it was time to pay for my purchases the technology joins up seamlessly, I paid for my products with my phone and the Amazon app taking advantage of the online rates even though I was buying off line.

It is this complete package that makes the new format so compelling, the store and products are impressive but it was the staff who wow-ed me. They smiled, engaged and raved about the merchandise. In short they made a big difference, I expected human interaction and I wasn’t disappointed. Any retailer in the world would give their right arm for the engaging brand ambassadors that Amazon has in its store.

Walking away I realised that for me this was a near-perfect mix of technology and real world retailing. I had never visited this store before, but the retailer already knew and understood me and enagaged me in a way I craved.

In the battle for retail sales, Amazon shows us that the physical store and product are important but that great people are critical. Many will be skeptical about online retailers re-entering the high street/shopping mall, but if they bring with them the excellent lessons learned from growing their businesses online it can only be of benefit to the consumer. Like all retail customers around the world, my wants and needs are changing and Amazon has recognized this. Other retailers will need to do the same and get every part of their offer in winning shape if they are going to compete.

The store format Amazon has created will be fairly simple to recreate from a store level up but is even simpler for Amazon which is not dragging a whole legacy network of stores behind it and can start from scratch. In the future all retailers will be defined by how they react to their customer needs and how change-able their offerings are.

Amazon is now everywhere and its ambitions are huge. The main lesson for its competitors is that retailers need to win everywhere, all the time.