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Amazon bookshops: The divine comedy of disruption turned on its head?

In November Amazon opened its first physical bookshop in Seattle. Then, last week, there was a rumour that it planned to open 400 bookstores which was quashed by CNET: “No, Amazon probably isn't opening hundreds of bookstores”.

Today the Bookseller announced that Amazon will open its second bookshop in San Diego.

However many stores finally do open, at initial glace, this seems like the ultimate irony. First disrupt the market and push out all those physical bookshops… then leap in and open a stack of its own. But what might this move really mean?

Well, first of all it is part of a general shift towards data driven omni-channel customer experiences. And secondly it looks like it might be what the market wants. In fact, only last June 53% of UK consumers polled by the Telegraph said they would like to see Amazon on the high street over any other online store.

So, how should we classify the move?

“Amazon’s physical-store expansion is not another ‘what’s old is new again’ move, nor is it simply an admission that a physical presence is necessary in order to maintain market share and increase profitability,” says Neil Capel, founder and chairman of customer experience company Sailthru. Instead he describes it as one of the “cohort of click2brick retailers”.

These include JustFab which opened its first physical store in Los Angeles in 2013 and Missguided which opened its first shop in the UK last June. It also looks part of the general trend which saw Alibaba invest $4.6 billion in Chinese electronics retailer Suning last summer.

How can data make an impact?

The extensive customer data now available via online channels means companies can now provide a range of targeted customer experiences to suit every purpose. Advanced analytics also means that companies can better stock stores based on up-to-date sales information.

“An API approach is emerging where retailers can connect their front end systems with their back end systems,” explains Ross Mason, founder of SaaS integration platform MuleSoft. “[This] creates a seamless experience for their shops, no matter if they are online shoppers, in-store-customers or both.” 

Capel of Sailthru adds: “I expect we'll see other major brands following suit as they realise and recognise that physical and digital are not separate, but rather complementary in order to provide the most comprehensive customer experience possible.”

But what might this say about pure play eCommerce?

Whether you see it as a divine irony or not, the move to physical shops certainly brings online retail full circle. Because while it may be cheaper to hold no premises and little stock, it also throws up logistical issues of its own. Especially the problem of returns. Now these can be avoided by adding back selective physical shops.

As Tristan Rogers, CEO of Concrete puts it: “This [actually] brings into question whether pure play eCommerce is all it’s cracked up to be, particularly in the fashion industry where returns are rife.”

He also point out that outlets like John Lewis effectively uses Waitrose for click and collect, and Amazon is looking to follow suit. “The new Amazon shops will essentially be logistics points for click and collect which could also be used for possible experiential activities such as reading and coffee,” he says.

What could this mean for digital innovation?

Interestingly, going back to the ‘old fashioned’ approach many rely more heavily on new approaches to engagement than before.

Richard Kolodynski, Senior Vice President of European Operations, iVend Retail suggests: “With ecommerce brands shifting towards a physical presence we can expect to see an increase in technology – such as cloud-based systems and ePOS implementation – being used in-store to enhance consumer experiences and integrate the retailer’s established online presence with the physical store.”

While Ian Tomlinson, CEO of Cybertill adds: “I think it is highly likely that when retailers like Amazon, who have been so innovative online, move into bricks-and-mortar they will implement some interesting technologies to enhance the in-store experience for consumers and try to disrupt the traditional store format.”

Amazon has been such a big disrupter it is also likely to also carve a path followed by others.  As Andreas Schmidt, product manager at predictive analytics company Blue Yonder puts: “Amazon will pave the way for other big online players to move to brick and mortar stores – but it will all depend on how successful they are.

“If it works, then customers will soon after expect this same experience and service from other big brands.”

 

 

Further reading:

“Omni”: The next digital disrupter?

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