If we are to believe recent news reports, it would seem that Amazon is making plans to trial its first high street store in the US. As a brand that is well established in the online world, will they be able to migrate to a bricks and mortar offering and still maintain their customer’s expectations? In this article, Alan Watson, MD of Barron McCann considers the challenges retailers like Amazon face when moving into offline retail for the first time.
Amazon is an impressive retail operation. In fact, I would go as far as to say that there are few brands which have been able to succeed to the levels that Amazon have done, particularly when you consider the substantial logistical challenges associated with their offering. Maintaining customer satisfaction when there are so many factors at play is no mean feat and they can certainly wear their online retail badge with pride.
The challenges faced by the high street are markedly different than the online world and it’s a much tougher marketplace to crack than ever before. Customers are increasingly demanding the immediacy that has been fuelled by the expansion of e-commerce but also want to touch, feel and experience the products before they commit to buying. This presents an interesting challenge for retailers who need to ensure they offer the best of both worlds to truly maximise sales and footfall into their high street store.
Many retailers start out life online and often, the move to a high street store is the mark of success, that they’ve finally ‘made it’ with a store presence! For Amazon however, there is no need for this kind of recognition, so we then have to consider the motivations for a store like Amazon venturing onto the high street for the first time.
So why would a store like Amazon desire a high street presence? Is it to increase sales of larger items which need to be touched and felt before purchase or is it purely a rather elaborate PR and branding exercise designed to help cement the Amazon brand not only in our minds when we’re browsing online, but when we are walking down the high street too?
An interesting report from Accenture might help shed light on this further as their report last year suggested that over two-thirds of consumers used the internet to research and browse products before going instore to buy. So perhaps the motivation for Amazon is to capitalise on this rising ‘Click and Collect’ purchasing behaviour? I personally think it is probably a combination of several factors.
Putting the motivation for the store aside, let’s also consider the practical implications for a new to market store. Amazon is clearly a very tech-savvy organisation, so it will be interesting to see how this is translated into an outstanding instore customer experience. I say outstanding, because I can’t really see how a brand with such technological prowess could get away with a basic no frills high street store! Will they follow the likes of Apple and opt for a highly experiential offering, with stores that are designed to be destinations for browsing, customer experiences, demonstrations and of course, sales! Or will they follow the likes of Argos and become a very simple click and collect venue? Will they opt for till-free stores, digital signage, instore WiFi capabilities? Will they engage in the growing demand for ‘beacon’ (Bluetooth technology) that communicate messages and product information to mobile users in the near vicinity? Whichever blend of technologies they select, it will be important that they take the necessary steps to ensure they not only work as they are supposed to on launch day, but continue to do so reliably as the weeks and months progress. There’s no point making a splash if you’re offering then dries up after the initial excitement has worn off! It’s also dangerous for a brand that trades on its success in online technology to have IT problems in its offline operations.
Ultimately, the success of any store entering the high street for the first time is one of customer satisfaction. In reality, it doesn’t matter if the store is designed as a method of attracting new customers, or as a delivery and collection function for existing customers. Meeting and exceeding customer expectations is the key for any retailer currently offering a multi-channel retail proposition and Amazon is no different. I for one will be watching this story with interest and if Amazon can make the transition effectively, there really will be no stopping them.
About the Author
Alan Watson is MD of Retail IT support, maintenance and service specialists Barron McCann. The company has over 30 years experience of working with large retailers, government departments, IT hardware and software companies. For more information visit
www.barronmccann.com