Last
week, I visited the first Amazon brick-and-mortar bookstore in the
Washington, DC area, a two floor structure in the heart of
Georgetown. As much as I wanted to dislike the store, it was almost
impossible to do so. You could not help but be impressed by the
design, merchandising and vibe that existed. There are a lot of books
on display, but not too many, and those that are featured appear to be
carefully curated similar to the offerings and approaches used by Amazon
online. Because I mainly read nonfiction, marketing, history and
social science books, I was impressed by the titles on display. This is
where Amazon's book store shines. It was obvious that Amazon's
merchandising of its brick-and-mortar book store is based on the
multitude of data that it has from its ecommerce and data service
operations.
Equally impressive to the merchandising was its
signage. Vertically oriented signs adorning the bookshelves told
customers If you like pointing in one direction, you'll love pointing in
the other. It was a stroke of genius. It's a play on the online
version of people who bought this also purchased the following items.
The layout is airy and spacious. There's a coffee café on the lower level and inviting
spaces for customers to simply hang out and read. There are also not
so subtle signs for upselling with large video screens encouraging
visitors to purchase an Echo, Kindle and other Amazon products. When I
took out my phone to take pictures of the store, a sales associate asked
if I was checking pricing. When he asked if I knew how much a book
cost, I said "yes" pointing to the retail price on the inside flap of
the cover. The sales associate then asked if I was an Amazon Prime
member. I responded affirmatively and at this point the sales associate
introduced me to the Amazon Shop app on his phone. Using the app to
click on an image of the cover of the book, he was presented with the
Prime Member price that was 43% off the suggested retail price.
Checking out was a breeze. Scan the bar code, swipe a credit card that is tied to your Prime account and just walk out the door.
Why is Amazon getting into the brick-and-mortar book store business
when it virtually owns online book selling, controlling a reported 64%
of all online book sales? The reason is explained by Scott Galloway in
his book The Four: The Hidden DNA of Amazon, Apple, Facebook and Google. "E-commerce
doesn't work, isn't economically viable and no pure e-commerce firm
will survive the long term," Galloway writes. He explains, "the cost of
customer acquisition continues to rise as consumers' loyalty to brands
erodes...In 2004, 47 percent of affluent customers could name a favorite
retail brand. Six years later that number dropped to 28 percent. That
makes pure e-commerce play increasingly dangerous. Nobody wants to be
at the mercy of Google and disloyal customers." Given Galloway's
observation, does it surprise you that Amazon's online retail operations
do not generate a profit?
Lessons for decorative plumbing and hardware showrooms. Walk
your showroom space. Do your displays and merchandise mix invite
customer interaction, inspire dreams or create a meaningful or memorable
experience? Evaluate your signage. What messages are you sending?
What could be your equivalent of 'if you like this, you'll love that'?
Is your merchandise carefully curated? When was the last time you
performed a line review to determine which products sell the most and
generate the most margin?
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