Amazon disrupts retail (again) with new department stores

After having successfully revolutionized online shopping, convenience stores, bookstores, grocery stores… Amazon has its eyes riveted on a new target: department stores.

Amazon is expected to soon open a series of department stores to sell physical products to in-person buyers. The move is sure to disrupt the entire retail industry and further strengthen Amazon’s dominance, but it could be good news for customers.

Amazon has its smaller and organized 4-star stores, as well as AmazonGo stores. 4-star stores only carry the highest rated products. One would assume that this approach in 4 star stores would also be explored as the inventory in their department stores only features high performing and sought after products. It can also be assumed that the payment technology used in AmazonGo stores (which do not have an actual cash register) will also be a feature (shoppers just leave the store with the items they want), but this is that’s speculation at the moment.

Amazon expands to department stores

Amazon hasn’t officially announced the new stores, but reports suggest the company is hoping to use department stores to expand its reach into clothing, housewares and electronics. This notion follows Amazon’s recent push for clothing, including recently the takeover of Walmart as biggest seller of clothes in the USA

Over the past few years, Amazon has disrupted not only the e-commerce space, but physical retail as well, starting with its cashier-less Amazon Go stores, bookstores, large-scale grocery stores, and Amazon Prime pop-up stores. . For years, Amazon disrupted department stores and forced them to change the way they do business. Now he is joining them.

Initial reports suggest the stores will be considerably smaller than traditional department stores (around 30,000 square feet, compared to the typical 100,000 square feet) and will include items from top brands. The first stores would be in California and Ohio.

A digital approach to in-person purchases

The move to physical stores also allows Amazon, long known for its focus on data and personalization, to collect even more data about its customers. Amazon’s department stores will add a new layer of information about each customer, including the time they spend looking at certain items, the areas they visit in the store, and the items they consider before making a purchase. . This increase in data will allow Amazon to create even more effective personalized campaigns for customers.

Data has long been crucial for online businesses, but a growing number of physical big box stores have recently invested in digital data and services. Amazon’s proven ability to collect customer data and use it to effectively understand and market to customers should enable it to seamlessly integrate digital data and services into its physical stores.

However, with an increase in data collection, customers may tire of Amazon knowing all about them. More customer data could generate bigger profits for Amazon, especially as it attracts advertisers, but also increases the need to keep this data safe to maintain customer trust.

What this means for the future of retail

For years, people predicted the death of brick-and-mortar retail, but Amazon’s shift to physical department stores shows that in-person shopping is still alive and well. But like everything Amazon touches, these stores are unlikely to be the traditional department store experience, but instead take a modern, more customer-centric approach with things like personalization, built-in technology, and experiential shopping. .

In addition to showcasing its brands and products, Amazon is expanding to department stores to increase convenience for customers. Instead of being limited to what can be ordered online and delivered in a day or two, customers can now shop in person and take an item home immediately. This focus on convenience will extend to all retailers and continue to put customers first.

Amazon has already shown its dominance in the e-commerce space by forcing countless competitors out of business. Its move to brick and mortar should lead other established department stores to re-evaluate their products and customer experiences so they can stay relevant and compete with Amazon. The increased competition tends to be great for customers as it forces all stores to improve their games and come up with great experiences, products and prices.

Where Amazon leads, others follow. The shift to physical department stores will shake up the retail industry, hopefully to the benefit of customers.

Blake morgan is a customer experience futurist, keynote speaker and best-selling book author The customer of the future. Be part of the brand new Customer experience community here.

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