Amazon developing new era of store retailing via Seattle book shop

Amazon recently opened a small book store in Seattle that taken at face value provides further evidence that the good old physical book store has plenty of life left in it yet, despite the havoc the behemoth itself has wreaked on the category over the last decade-and-a-half.

Or does it? The likelihood of Amazon going on to roll-out a chain of such high street units is exceedingly low. It involves far too much friction and goes against pretty much everything the US disruptor has stood for.

What it is all about for Amazon is data. When shoppers are interested in a book they scan the code (on their smart-phone or a store assistant can do it for them on the store’s devices) to bring up product information, customer reviews, and most importantly the price – which is not fixed and fluctuates during the day.

What is most interesting is that when customers scan from within the Amazon app on their phones a direct link is created between their activities in the physical environment and what they have been up to online. It’s possible for the company to therefore analyse the shoppers’ buying histories and shopping patterns and to use this insight to feed them real-time recommendations as well as delivering highly targeted promotional offers in-store based on past purchases.

The price offered to a customer can be determined by this rich data so valuable shoppers could receive more competitive prices. For the first time we will be seeing real evidence of dynamic pricing in-store. Retailers have historically been shy of exploring this area because of the potential to upset some customers. Dealing with it in-app provides a sufficient level of opacity, with the differential pricing being handled in a very personal manner.

When Amazon has ironed out the wrinkles in this new way of shopping in-store it will have a solution that many retailers would be very keen to adopt because they know the massive value in recognising the shopper both online and in-store and providing the elusive link that ties-up all their interactions with the retailer.

It therefore looks as if Amazon is close to delivering its next solution for retailers that it could add to its existing cloud-based solutions (Amazon Web Services). It is moving gradually away from its initial role of retailer to being a frictionless service provider.

Glynn Davis, editor, Retail Insider

K3 Retail deliver multi-channel solutions that enable retailers to create joined up shopping experiences for their customers whether they choose to buy on-line, direct, in-store or via mobile. It has over 20 years’ experience delivering award winning solutions, to more than 175 internationally recognised retail brands.