Amazon is an undisputed leader in digital retail, but soon the online giant will venture into the realm of physical stores. This isn’t so much a choice for Amazon as it is a necessity if the company plans to remain a leader in retail. Modern retailers need an omnichannel strategy that understands and caters to every channel that customers shop in.
So what will these physical stores look like? I predict they’ll be clean cut in the front and a bit hectic in the back — call it the Amazon mullet. By that, I mean stores will have a showroom up front with a limited selection of inventory and engaging multi-touch displays, while the distribution center will take up real estate in the back. The storefront showroom will be stocked with products chosen purposefully by data mining Amazon customer purchases for the surrounding micro-geography. The distribution center in the back will hold the less-sexy, repeat purchase products that local customers could want for instant delivery — or instant pick-up. And why not a drive-thru window for your Amazon order?
Retail is moving towards this model already
You’ve probably already seen this “mullet” concept in the wild. The most notable example is Service Merchandise (remember them?), a jewelry store turned full retailer. It translated a tactic of its early beginnings (keeping jewelry securely in storage, save for a showroom model) where shoppers browse and get a hands on experience of products without having to lug them to a cash register. In the pre-smartphone era, customers received a paper ticket at checkout that they’d redeem by driving to a pickup area behind the store. This proved to be a hassle for many consumers, and Service Merchandise shut its doors in 2002. It was an unlikely retail pioneer before its time. Then, of course, big box retailers took over.
More recent examples that have aped this mullet-like strategy include brands like Advance Auto Parts, which has leveraged its distribution strategy to enhance customer experience (and increase sales, to boot). Then there’s the rise in BOPIS (Buy Online, Pickup In Store) shopping among consumers. Retailers like Home Depot have embraced this, nurturing the omnichannel experience with great success that’s resulted in 40 percent of online purchases being picked up in store. And finally, glancing at trade journal headlines reveals several top retailers that are reorganizing store strategies to better take advantage of distribution while enhancing the store experience.
How Amazon’s stores will differ
Amazon first tiptoed into branded stores with the launch of its first physical bookstore in November 2015, with several more locations being announced earlier this year. More recently, the…