Amazon Books is now open for business in the US city of Seattle. The floor is hardwood and the shelves and displays are weighed down by beautiful, physical books. It looks and smells like any ordinary bookstore.
But make no mistake. It’s anything but.
Amazon’s new store is the digital economy’s coming full circle – flipping the model to tie together online and offline in a whole new way.
It’s establishing land-based business on e-commerce prowess, and modelling the methodology of the next generation of retail.
The rise of an online superstore
From the get-go, Amazon never had the privilege of meeting clients on the sales floor, watching first-hand the effect of sales and promotions, rearranging displays according to changing tastes. But it had something so much better: It had data. Big data. Ridiculous amounts of data.
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And by turning this data into smart, emotionally intelligent data, Amazon managed to give its customers so much added value that it changed forever the face of global commerce. Because Amazon did what every online business must do: It used customer data to really get to know its customers.
Today, Amazon is effectively the world’s largest e-commerce search engine and the starting point for more consumer searches than Google.
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Amazon is able to achieve this exceptional feat by leveraging data to really understand the wants, needs and hesitations of individual shoppers.
It also harnesses the collective consciousness through personal recommendations, cross recommendations and inter-personal references. The overall shopping experience is informative, personal and empowering.
Bypassing the land-based phase has also enabled Amazon to offer competitive pricing. Without the expanses of store based operations — rising mall rents, distribution costs and personnel salaries — prices of books (and later on of other products too) were cut dramatically.
During the past decade, online competition and the rise of e-books were a major force behind the collapse of some of the world’s largest bookstore chains, including global player Borders and Angus & Robertson, previously Australia’s largest book retailer.
Leveraging online data for offline sales
In Amazon’s case, data and innovation have outdone the traditional benefits of the physical world: Immediacy, personal connection and physical contact. But Amazon knows that people still yearn for the shopping experience, the book right now, the bookseller’s recommendations, the thinking process that occurs in a book store — even more than they yearn for endless variety or for shopping in bed.
Perhaps it’s also no coincidence that this is the first year since the onslaught of digital readers that e-book sales fell dramatically in favour of physical books. A plot twist indeed.
The new Seattle outlet leans on Amazon’s big data algorithms and customer-centric ideology to display to consumers just what they’re looking for in the format they’ve learned to know and love.
In Amazon’s case, this means giving very broad context to books by curating them according to both editorial and popular parameters.
The store showcases books with an online rating of at least four stars, tailored to its Seattle audience according to their documented Amazon reading data. Every spotlighted book also comes with a quote from online readers’ reviews, a review count and a star rating.
A promo for the future of retail
Amazon has come a very long way from its days as an online bookseller.
Books now account for a tiny fraction of its overall sales, and the Seattle store is but a tiny fraction of that. But Amazon is signaling that the counterbalance between online and offline retail is changing in deeper and more meaningful ways than Black Friday deals — and all retailers should be paying attention.
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Data-driven, digital businesses that are taking on the shape of the real thing, bringing with them a wealth of knowledge about their specific customers and taking the guesswork out of selling may just be the inevitable direction of retail.