For years, we’ve been saying that the reports of the death of bricks and mortar retail stores was greatly exaggerated. Amazon 4 Star Stores are adding more weight to that argument.
What do Amazon Go, Whole Foods, and Amazon 4 Star Stores all have in common? They are bricks and mortar retail stores. That’s right, the world’s largest on-line retailer that was “supposed” to replace bricks and mortar stores is now jumping into the bricks and mortar retail business! Why? What do they know that the pundits who have been heralding the death of bricks and mortar have missed?
It’s simple – stuff is heavy. And moving heavy stuff cost money! “But I thought shipping was free?” you might protest. But FedEx, UPS, DHL and the USPO employees are all still getting paid! Where does that money come from? It comes from you! You are paying for shipping, one way or another. This is not to say that Amazon and its suppliers are also eating part of these cost to get you to get your business in the first place. With “free shipping” they can at least appear to compete directly with bricks and mortar stores in the short run.
But sooner or later, the stuff you buy either has to be shipped to your door or you have to drive to a store, pick it up, and drive it home. The question is, what is the most efficient way to get stuff to you? How about if the retailer takes it to a store in your neighborhood and has you pick it up there? Well, that is the essence of the value proposition behind bricks and mortar. Packaging is reduced. Shipping is reduced. Handling is reduced. It’s simply more efficient!
In other words, having a store reduces the cost of shipping for the producer and the retailer. Now that Amazon is a giant and has forced many independents and smaller bricks and mortar retailers out of business, maybe it’s time for them to recover those costs and ask you to drive to get your groceries, and now, your other items as well.
There’s something else going on at bricks and mortar stores that Amazon is recognizing and that is the power of tactile contact. It’s one thing to print on your screen that the item you are looking at is rated 4 stars or higher by online buyers, but it quite another to have it physically there in your neighborhood! Now you can go see it, feel it, and compare it to other real products before you buy. You are much more likely to know what you are buying, and for Amazon it significantly reduces return shipping.
With 4 Star Stores, Amazon can now enjoy something hard to achieve online – the impulse, or notion, buy. The customer wasn’t looking for what they bought, but they stumbled upon it! And don’t forget the social and fun aspect of visiting a real store with other real people and real clerks there to help you.
Is retail starting to come full circle? Or did Amazon undersell bricks and mortar retailers just to take their storefront?
Maybe its time to get out the old bricks and mortar playbooks that call for such antiquated things as seasonal promotional materials, in-store demos, and display merchandising. While we salute Amazon 4 Star Stores for their crowdsourced rating system and its ability to attract physical customers, we also appreciate the old school bricks and mortar retail survivors who have mastered online orders and home delivery. The future is evidently not going to be online vs brick and mortar. It’s going to be online and bricks and mortar!
Who We Are
Michael Houlihan and Bonnie Harvey co-authored the New York Times bestselling business book, The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand. The book has been selected as recommended reading in the CEO Library for CEO Forum, the C-Suite Book Club, and numerous university classes on business and entrepreneurship. It chronicles their humble beginnings from the laundry room of a rented Sonoma County farmhouse to the board room of E&J Gallo, who ultimately acquired their brand and engaged them as brand consultants. Barefoot is now the world’s largest wine brand.
Beginning with virtually no money and no wine industry experience, they employed innovative ideas to overcome obstacles, create new markets and forge strategic alliances. They pioneered Worthy Cause Marketing and performance-based compensation. They built an internationally bestselling brand and received their industry’s “Hot Brand” award for several consecutive years.
They offer their Guiding Principles for Success (GPS) & Shelf Smarts courses to help consumer product brand builders achieve success. Their book, The Entrepreneurial Culture: 23 Ways To Engage and Empower Your People, helps corporations maximize the value of their human resources.
Currently they travel the world leading workshops, trainings, & keynoting at business schools, corporations, conferences. They are regular media guests and contributors to international publications and professional journals. They are C-Suite Network Advisors & Contributing Editors. Visit their popular business site at www.thebarefootspirit.com.
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