E-Commerce stories
Amazon plans to open large retail locations akin to department stores in US. It is one of the few retailers to take the reverse route in business — that is from online to offline — compared to department stores such as Bloomingdale’s, Kohl’s or Macy’s.
Amazon is opening its first physical bookstore, 20 years after the world’s biggest online retailer started selling publications on the internet — The Guardian (Nov 2015)
One might speculate that this strategy will fall flat on its face but I believe that it is opening more doors to understand its consumers and deliver faster, better services. Here’s how -
1) Amazon can collect offline consumer data. Ad networks and brands have benefitted from Amazon’s vast online consumer behaviour data collection — consumer’s demography, purchase preference, purchase frequency. Addition of offline data will provide depth to understanding complex consumer behaviour which can be used to enrich marketing recommendations
2) Amazon has loyal customers and, of course, the brand name. Customers who are averse to online purchases can become a potential offline amazon customer or an offline customer might become a potential online Amazon customer
3) Amazon’s data-centric approach to online retailing is implemented to experiment with the offline retailing space
4) Amazon can provide instant gratification to customers who want their products faster than ‘same day delivery’
5) Amazon can enable faster returns
Since 2015, Amazon physical stores expanded to multiple countries — from Amazon books to Amazon 4-star, Amazon Fresh, Amazon Pop-up, Amazon Go, Amazon Go Grocery
Going by the increasing rate of multi-channel data collection, it would not be a surprise to see a need for offline consumer privacy. It will also be interesting to see how consumers respond to Amazon globally as it competes with department stores once again.
Fin.
