Did Amazon endorse old-school brick and mortar?

By Patrick Spear, president and CEO, Global Market Development Center

If Amazon opens more brick-and-mortar stores, the e-commerce behemoth would throw yet another curveball at the retail scene. One word comes to mind: disruption. If you aren't feeling it, check your pulse.

As brick and mortar retailers scramble to grow their digital presence, Amazon may be switching tactics and focusing on the brick-and-mortar scene. Retailers are likely sitting back, scratching their heads, wondering what an Amazon cross-channel strategy could mean.

First, let's acknowledge it's not unthinkable that Amazon would do this. As depicted in the book "The Everything Store," Amazon founder and CEO Jeff Bezos is on a relentless march to offer unlimited selection and seductive convenience at disruptively low prices. Beginning with Amazon.com, the company has since expanded its platform to include Amazon Web Services, Amazon Prime, Amazon Prime Now, Amazon Dash, Amazon Echo and perhaps this latest iteration, Amazon brick and mortar.

In 2014, retail e-commerce sales grew by 30 percent, in-store sales for most categories remained nearly flat and CPG grew at a whopping pace of 42 percent year-over-year, according to 1010data. The insights company attributes the 2014 launch of Amazon's SNS, or Subscribe and Save, feature as the leading catalyst for the growth rate of e-commerce that year. In fact, more than 20 percent of all 2014 CPG sales growth was a direct result of Amazon's SNS sales, and the company is not slowing down.

Second, Amazon continues to create platforms for convenient, near-frictionless commerce in online formats that may just translate to their retail storefronts. Their convenience comes in many forms, which when paired with their troves of consumer data has the potential to enable them to get even stickier with their customers—an opportunity that many traditional brick-and-mortar retailers strive for, and one Amazon may now be endorsing through old-school brick-and-mortar expansion.  

While the idea of Amazon hitching to the brick-and-mortar bandwagon is intimidating at first glance, it also validates the role that traditional brick and mortar plays in the retail ecosystem. Amazon's user experience prioritizes functionality over emotion. This makes it a harder sale for premium, inspirational/aspirational or lifestyle brands, which has created an advantage for the experience-oriented retailer.

Opportunities for brick-and-mortar retailers abound, and not surprisingly, Amazon and other e-commerce players, including Warby Parker and Birchbox, want to play in this space.

It all comes down to this: Shoppers want options. They want the convenience of online, but they also want the tactile, emotional experience that brick and mortar affords. The key is to innovate and differentiate. I think of it this way: Give me something I can't get anywhere else. Save me 10 minutes, or save me 10 bucks. Make my day, or change my life. That's the mentality of today's consumer and if you're not satisfying their demand, someone else will.
 

Patrick Spear is president and CEO of Global Market Development Center. GMDC connects retailers, wholesalers, suppliers and service/solution companies in the General Merchandise and Health Beauty Wellness marketplaces, creating innovative growth in commerce through inspired collaboration. 
 

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