I gave Amazon 4/5 stars for successfully bringing online retail trends into offline shopping.
I visited Amazon’s new 4-Star store in New York which sells a weekly-rotating inventory of products from its site with a consumer rating of 4 stars or more. The brick-and-mortar store crams in customer favorites from 30+ categories such as in home tech, candles, books and gifts for kids, grown-ups and even your pet.
The store does a great job of bringing online retail trends into a real store. It displays star-ratings and consumer reviews by every product and offers one-click checkout via the Amazon App (shoppers scan QR codes as they go to add items to their basket). E-commerce has forced the closure of more than a few traditional retailers, and there are four things retailers can learn from Amazon’s foray into brick-and-mortar shopping.
Promote the benefit of becoming a loyalty member – everywhere
Price tags in the store compare the price of items for regular customers to the price for Prime members, and show the percentage difference. Each price tag advertises a core benefit of Prime membership – access to special and exclusive prices. Shoppers can easily join Prime at checkout and make the most of the Prime-only rate. This is important because once a Prime member, consumers allegedly spend more with Amazon since delivery has been prepaid. Furthermore, the price tags are all electronic, which allows them to update as easily as prices online. The smart store of the future could recognize (and give preferential pricing to) its most valued loyalty members. It could also nudge those who have not made a recent purchase.
Use data to reduce consumer choice
Amazon’s vast online selection can overwhelm consumers. To overcome this, it uses search, consumer reviews and data on which viewed items are actually bought to help focus the path to purchase. The 4-Star store uses slightly different data-driven tactics to reduce choice. The second a shopper walks through the door, they are immediately surrounded by the best products as decided by consumers. Amazon’s customer-approved categories reassure shoppers that they are looking at only the best products, and do not need to check online. Additionally, Amazon uses shopping data for consumers who are not sure what they are looking for. Unusual categories such as “Trending in NYC” and “Most Wished For” reveal popular items for shoppers’ discovery. Together, this allows customers to maximize their time by not performing a search themselves. This essentially bypasses the need to choose between brands because the best brands are chosen for you.
Keep up with newer products consumers only expect to buy online
The 4-Star store will continually change stock according to what is trending online. This not only keeps inventory fresh for every visit, must-haves and new products create a reason to come back. Brick-and-mortar stores remain an important place where customers are able to interact with products (even if they buy them on Amazon later). Naturally, Amazon has featured items that consumers may not have encountered offline to make the experience memorable, like iRobot’s programmable Roomba vacuum.
Showcase your vision through the CX
As well as experiencing trending items, visitors to the store are invited to interact with Alexa-enabled products such as telling Roomba where to clean. Amazon’s Echo-connected microwave signaled a company vision to make Alexa the interface between the smart home of the future. This is exactly the kind of new behavior that consumers need to try out in retail environments before purchase. It is difficult to conceptualize the benefits from home.
Identify growing categories
It came as a surprise that 4-Star doesn’t offer any beauty products despite the large selection on Amazon.com. Particularly as more than two thirds of American women wear makeup and cosmetics every week. At Foresight Factory we are tracking how beauty ideals are evolving to become more diverse and holistic. This includes the rise of male grooming, which increases spending among a nontraditional audience. There are 70,000+ beauty products rated above 4 stars on Amazon’s website. Amazon missed an opportunity by not capitalizing on this powerful trend. For me, this brought the store’s overall rating down to four. If more beauty products are present, a wide range of customers might discover new favorite products they never thought to search for. Fortunately for customers, their feedback can change the store’s selection next week to capture this.
Sign up to our newsletter for further consumer insight and company innovation.
