More lessons from Amazon as it expands its brick-and-mortar presence in NYC

  Photo Credit: Sarah Tew/CNET | As  reported by CNET  on 9/27/18.

Photo Credit:Sarah Tew/CNET | As reported by CNET on 9/27/18.

In another expansion into the brick-and-mortar realm, Amazon opened a new physical store in New York City’s SoHo neighborhood featuring its best sellers.

Amazon explains, “We created Amazon 4-star to be a place where customers can discover products they will love. Amazon 4-star’s selection is a direct reflection of our customers — what they’re buying and what they’re loving. We started with some of the most popular categories on Amazon.com including devices, consumer electronics, kitchen, home, toys, books, and games, and chose only the products that customers have rated 4 stars and above, or are top sellers, or are new and trending.”

The Amazon NYC store is just the latest of several physical retail spaces the company has opened since 2015.

There was Amazon’s acquisition of Whole Foods last year, which left several analysts scratching their heads about why Amazon would want to expand its grocery business. Then there was Amazon Books which opened a NYC location in Columbus Circle, also in 2017.

The common thread seems to be serving its existing Prime customers, and maybe even luring in more members with a number of perks available at Amazon’s brick-and-mortar locations.

It’s what Forbes calls, in the case of Whole Foods, “an omnichannel combination of online and in-store goods, where customers can come into their local Whole Foods and pick up their entire Amazon order – food, books, and everything else at once.”

The article explains, “The synergies with Amazon’s technology are clear. ‘Amazon has an opportunity to give Prime members automatic entry in a new Whole Foods benefits program,’ says Brent Franson, CEO of retail analytics firm Euclid Analytics. ‘They could also offer the option to pay for groceries using the Amazon app, or sync your Alexa-made grocery list with your app while in-store.’”

Amazon Books takes a similar approach. Last year, we wrote about Amazon’s opening of a bookstore in New York City’s Columbus Circle. In our blog we note, “Unlike traditional bookstores, all the books at Amazon are presented with their covers outward and accompanied by a placard featuring customer reviews and a bar code that can be scanned using the Amazon app for pricing and additional information… Subscribers to Amazon’s $99 per-year Prime service will receive the same, discounted Prime pricing they would see if they were shopping online; if you are not a Prime member you will have to pay the regular retail price listed on the book.”

This lends itself to the same question we asked last year: What can small businesses learn from Amazon and its NYC store?

Successful retail locations provide benefits and unique customer experiences that online cannot deliver. And, it seems, Amazon is trying to tap into some of the magic you can only get when shopping in person.

To compete with a retail giant like Amazon, Forbes offers several suggestions for brick-and-mortar retailers summarized below.

Have an e-commerce strategy
According to Forbes, “The limits of a physical location start to melt away when you supplement your brick-and-mortar operations with the limitless potential of the internet.”

Add Value For The Customer
Forbes gives the example of Medly Pharmacy which fills prescriptions and delivers them to customers for free in New York City.

Offer Better Deals In-Store
Forbes observes, “The fact of the matter is, people feel they can find the best deals online, and will often forego visiting a store for this reason alone. Giving them an incentive to make the trip can increase foot traffic.”

Offer Local Pickup
Not only do you encourage people to buy online, it gets the customer in the door, where you have another opportunity to sell to them and create a relationship.

Sync Your Online And Offline Efforts
If you are offering a discount online, make sure the same discount is in the store.

But, in the end, it is still about customer service. Whether online or in-store.

“Creating a consistent and helpful environment for customers is key,” notes Forbes. “All it takes is one poor customer service experience to make a bad impression that a client will always remember.”