Amazon uses data effectively in its new bookstores, but some of the technology is more annoying than helpful.

Paul Miller, CEO, PMA Digital Solutions

Paul Miller, CEO, PMA Digital Solutions

I hate to disappoint all of the 80’s music buffs out there, but the title of this article is not a reference to Olivia Newton John’s hit song (you can listen to it here if I got you in the mood). Instead, I want to walk you through the experience I had as I walked through Amazon’s Chicago-based bookstore and what it means for the future of retail. There’s a lot to be learned from what they are doing, but I’m not convinced they are doing it all right.

Omnichannel Done Right

The first thing that hits you as walk into this relatively small footprint store is that one staple item is absent: the price tag. Instead, review tags have been prominently placed under the books, allowing the curious book lover the ability to see what’s hot, all thanks to reviews from the Amazon website.

These reviews (along with local book-buying behavior data) also feed into the live product recommendation engine: Amazon confidently tells you that if you read Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future, you’d love to read Tools of Titans, just as they do on their website. This is omnichannel done right. They are leveraging the Big Data from the online purchasing habits of their customers to improve the shopping experience in their brick-and-mortar stores.

Achieving the Right Omnichannel Balance

However, in some ways, the confluence between in-store and online is just plain annoying and headache-inducing. Since there are no price tags, I was forced to either scan the book using the Amazon app or use one of their price-scanning machines. Sure, the process is not overly difficult, and sure we are all glued to our phones, and sure Amazon can get more data out of you if you scan the book with the app, but sometimes I just want to be in the moment and shop in a real store. I’m all about digital, but sometimes I just want to be firmly planted in the real world.

advertisement

I think there were some missed omnichannel opportunities. For example, unless I missed it, I didn’t see any signs pointing out to me which books were available on the Kindle. Although they had the Kindle for sale, it was felt like a sidebar or an afterthought, as opposed to an integral part of the experience.

I’ve got to give it to Amazon for trying to incorporate mobile payments into the experience, but I think they’ve missed the boat. In principle, this should simplify and streamline the buying process. Although you can order one of the books via the Amazon app, you are still required to go to the cashier who needs to scan the bar code on your phone to verify the purchase. At this point, it almost seems that allowing you to buy via the app is digital for digital’s sake and does not provide any major benefits for the consumer (besides the fact that your payment details are stored on the app). I have no doubt they are working to make this more seamless, akin to the Amazon Go cashier-less grocery stores that they are testing.

Now What? Some Implications for Retail

It goes without saying that the retail game has changed. Amazon has been an amazing disruptor and they are definitely not done! But traditional retailers have a lot of options to remain competitive and to continue winning their fair share (or more) of customers’ spending. Here are just a few thoughts and recommendations I’ve been thinking about:

My first recommendation is to explore all options to make the funnel bigger…and more productive. Are you fully exploiting digital and offline marketing techniques? Have you forged strategic relationships with platforms that can bring you new customers? Once you get the visitor to your site or your physical store, are you blanketing them with a personalized experience that is imbued with the greatest amount of knowledge one can have in your arena?

I’m a believer in building out great content, including rich images, 360-degree views, video, reviews, usage ideas, etc. It’s not just a nice thing to do…enhanced content drives conversion.

advertisement

On the physical retail side, while Amazon’s foray into this realm has a number of slick tricks, they missed the opportunity to create experiences and grandeur that keep you coming back into a store. They undoubtedly have the largest selection of books available online, yet it was not evident when shopping the store that there was more available online. Don’t make that mistake.

Show a few of the top sellers and make it very clear that you have a plethora of other options available online. And train the store staff to show customers how and where to find these products. Lastly, if customers are buying products that are likely repeat purchase items, consider launching a subscription program. If you have excess IT capacity and acumen, you can attempt to build one yourself on your ecommerce platform, or use an established leader to launch and optimize the experience.

Paul Miller, CEO of advisory firm PMA Digital Solutions, has held senior e-commerce positions at such companies as W.W. Grainger, Sears and Williams-Sonoma.

Favorite