The Forbes article, Why Would Amazon Open Physical Stores?, provides insights about what may be missing in e-commerce and the value that physical stores can provide.
The online retail behemoth opened its first physical store earlier in 2015 in a Seattle mall. The store focuses on the products that got Amazon its start: books. The company has indicated it is looking to open a number of other bookstores around the country in the coming years. While the company has been tight-lipped, one analyst projected Amazon will open 300-400 stores.
Why would the company that has led the revolution of online shopping seemingly shift its strategy to four walls and a ceiling? Here are a few of the core reasons.
Physical drives virtual
Many consumers still base their online purchases on impressions gleaned from visiting stores in person. In an actual store, consumers can touch and feel a product, assess its quality, see if it fits or read a few pages. From that perspective, Amazon can reinforce its brand by offering physical locations to test out the goods.
Retail stores are already rethinking the physical store configuration. Smart sensors in shelves and displays are already changing the way consumers experience shopping. Those sensors can trigger in-the-moment deals, coupons or alerts. These technologies can deeply enhance the shopping journey.
Other technologies can make the physical experience more like the digital one. All kinds of new tools have entered storefronts in recent years, such as digital signs, augmented reality, in-store kiosks, touchscreens and video screens.
Prompt delivery has long been an Amazon hallmark. The company has long offered reduced delivery costs, free delivery and now, same-day delivery. With physical stores, delivery is instantaneous. The stores also give Amazon the chance to offer the popular “pick up in store” option that other retailers can provide.
With physical stores, Amazon also expands its ability to have additional locations in which to stock heavily demanded items, which can further reduce shipping costs and time.
More competition, more business innovation
Remember Borders? Amazon was considered to be one of the core reasons why the national retail bookseller, and others, have declared bankruptcy. For independent bookstores, not to mention the few remaining national chains like Barnes and Noble, the Amazon news is likely not welcome. By competing with other physical stores, Amazon may very well drive a further stake into the heart of retail bookstores.
Physical stores aren’t going away
The reality is that there will always be room for some physical storefronts. The type of stores, the products and services offered, and the technologies provided will be an evolutionary experience. For Amazon, there’s no reason not to be a part of the physical storefront marketplace.
For years, Amazon has been an innovator by focusing on what customers want. With its storefront strategy, the company is returning to retail’s roots. The results will speak for themselves.