Amazon Primed to Move into Stores but What Might this Mean for Retail Business Models?
In a development that few retail analysts would have predicted twelve months ago, Amazon is planning to open several large bricks and mortar retail sites akin to department stores across North America. If the ‘pilot’ proves a success, this could herald the start of a global land-grab that would likely see Amazon disrupt the physical retail space, in much the same way as it did in the ecommerce space nearly a decade ago.
While many industry commentators have derided & long-predicted the eventual death of high-streets & physical, in-store shopping, this news flies in the face of popular opinion & will give many retailers (big & small) hope for the future. If the king of ecommerce, Jeff Bezos, clearly sees value & a future in physical retail stores, there must be something in it right?
While the news may be welcomed as a boost for traditional high-street business models, it also raises a number of pressing questions for retailers, many of which have literally just weathered the challenges of the pandemic, only to find themselves confronted by a new, no less (potentially) transformational storm on the horizon.
“This latest move into physical retail space validates what we’ve been saying all along, that physical stores are not going away any time soon & even Amazon recognises the value of providing their customers with a true omnichannel experience. Amazon’s announcement should serve as a wakeup call for all retailers that they need to go all in on omnichannel
“The primary defence retailers had is about to be breached; to survive this next phase in Amazon’s evolution they need to prepare their systems & processes for a new marketplace dominated by those brands that are able to deliver seamless, personalised shopping experiences simultaneously across physical and digital channels.”
(CEO Manhattan Associates, Eddie Capel)
Let’s be clear, Amazon is very good at what it does & by bringing a digital first approach to bricks and mortar retailing will certainly bring new, creative and technology centric options for the consumer.
The sheer weight of technological experience & its willingness to innovate & disrupt makes Amazon a force to be reckoned with in every sense, but in every challenge lies opportunity & the way we see it, the Amazon announcement is an opportunity for all retailers (big & small) to double-down & go ‘all in’ on omnichannel.
To survive & thrive, stores will need the technology to ensure that the right products are available (regardless of where in the store network they are) to give consumers the complete unified commerce experience.
For example, if a consumer walks into a store, they need to know that they are getting the best price possible (regardless of the channel they started their journey on) & that a product is available to either purchase on the shelf, or that it can be paid for in the store & delivered to their front door.
Establishing the right technology infrastructure, including everything from omnichannel & Point of Sale systems, to order management & warehouse solutions, will give brands the flexibility, agility & scalability they need to face-off against this new disruption heading their way.
Sticking to traditional models has already led to the demise of many high-street, retail stalwarts over the last two decades, so it’s very much a case of needing to adapt & prioritise to customer expectations, now.
While Amazon’s entrance to the physical market may serve as a shot in the arm for physical retail & confidence in the high-street overall, it also underlines the pressing urgency to reinforce omnichannel strategies & the need to deliver true omnichannel capabilities right now.
If retailers miss this window of opportunity to act, then they risk the daunting task of going head-to-head with Amazon on a one-on-one basis & there are few brands, regardless of reputation or size, that will relish that challenge.