Amazon Goes Multi-Channel as Quidsi Opens Stores
There are a number of thoughts that come to mind when Amazon.com is mentioned. ‘Brick and mortar stores’ is not normally one of them. That said, Amazon’s Quidsi business (Diapers.com, Soap.com, BeautyBar.com and Wag.com) is looking at opening a 1,600 square-foot BeautyBar store in Manhasset, N.Y., according to a WWD.com report.
The store is expected to feature 75 brands including Bliss, Dermalogica, Diego Della Palma, Malin + Goetz and Philosophy. The store will have two treatment rooms with on-staff aestheticians and makeup artists.
Katina Mountanos, site director for merchandising and marketing at BeautyBar, told WWD.com, “This is our first foray into building a store strategy for BeautyBar. We’re not opposed to opening more stores in the future.”
The BeautyBar store would not be the first for a company. Quidsi COO Vinit Bharara discussed a Diapers.com registry store opened in Upper Montclair, NJ when he spoke to RetailWire in April 2010.
“It was sort of a novel concept, no one had opened up, at least as we have seen, a specialty registry store, that is a store whose sole focus was on registry,” Mr. Bharara told RetailWire. “We thought that could be an interesting thing to test. So most of this really was a function of testing, just trying to understand customers’ needs and wants and also testing the concept of a specialty registry store and see if we could potentially roll that out in other markets, if this was or is successful.”
Discussion Questions
Discussion Questions: Do you see more pure play e-tailers opening physical stores? Are there particular e-tailers that you think would benefit from opening stores?
An equally interesting trend will be e-tailers teaming up with traditional retailers in adjacent categories to extend the reach of both companies into the shopper’s wallet. Perhaps 1800Flowers will team up with Walmart, Zappos will offer returns through The Gap or Zynga will offer Farmville modules at Game Stop. There are plenty of possibilities and more than enough vacant retail space.
I hesitate to say that e-tailers should embark on a physical store binge. But I do think the learning and insights that can come from more direct contact with the physical shopping process will be significant. Once the best e-tail operators have more insights, they will no doubt raise the bar again with experiences that delight shoppers in new ways both online and offline.
Seeking these new inflection points and creating shopping experiences to deliver them to shoppers is the way out of the discount drain that retail is swirling in right now. I admire the innovative spirit that drives continual testing and learning.
We will see more e-tailers seek to solve the same problem Quidsi identified. It’s not the need for additional distribution, like a traditional store opening strategy. It’s reducing online buying friction. Quidsi is enabling trying before buying–adding the experience of retail that online can’t reproduce. Consider:
*A design more showroom than store, with samples rather than fully stocked inventory
*Treatment rooms and make-up artists to present an authentic experience
*An environment that goes beyond competing on price to showcasing quality and choice
BeautyBar is delivering experience rather than physical product. E-tailers in other non-essential rather than utilitarian categories can similarly benefit.
Online social networks like LinkedIn and Twitter have extended from online to in-person meetups. With Quidsi’s new parent, past is not necessarily prologue. Yes, Amazon turned bookstores, and then books, into bits. But being virtual doesn’t mean it won’t get physical from time to time.
Lands’ End Inlets have performed a similar function. For me, finding dress pants in the right size was always a challenge, and even when I found a store-distributed brand that fit well, consistent availability was always a problem. (Looking at you, Macy’s.)
I wasn’t thrilled with the idea of ordering pants online and then having the hassle of returning them, but when Lands’ End opened outlets here in the Twin Cities, I was able to try many different sizes and styles right at the store.
In just one trip I found exactly the right sizing and style of slacks I was looking for. That was two years ago and I’ve exclusively bought pants from Lands’ End online since then – and they’re getting more of my shirt business, as well.
So in this example, yes, having physical retail definitely made it easier for me to purchase online. Would love to see more merchants take this approach.
As I said in a presentation as recently as last week, of course every retailer needs a website; going forward, every e-tailer will need a store. The definition of “scale” has been updated. Boy, it’s going to get mighty crowded out there!
It kind of reminds me of when Sears and Montgomery Ward started opening stores about 100 years ago after establishing mail order as a viable business model.
We will be seeing more etailers in the bricks and mortar world–especially in high-growth categories like beauty care. Highest number of new product intros is in cosmetics–fiercely competitive, high margin, constant need to refresh products. Consumer feedback essential here to build brand around loyal shoppers. Building stores makes tremendous sense in this space to grow brand.
I have no clue about the meaning of Mr. Bharara’s statement, “that is a store whose sole focus was on registry.” Does it indicate a store with a single product line or narrowly-defined demographic need? I get that. Registry? Consultant neo-speak. Probably looks great in “C-3POs” (Consultant PowerPoint presentations).
But more to the point, Amazon.com has an opportunity to lay off some cash in an experiment in which they have little or no experience while taking advantage of the positive tax implications therein. I think that Ron Margulis (one of my RW heroes) has it right: If etailers want to go B&M, team up with a compatible B&M.
Most pure-plays are still thinking about how to maximize their digital opportunity. However, there are compelling reasons to open stores. First and foremost, they offer a fantastic branding experience that drives better brand recall and brand equity. Secondly, for many companies it can be a cheaper way to drive clearance goods. One of the better case studies is the Lands’ End executions inside Sears stores. The ability to pick up in-store and to try on in-store is compelling for apparel pure-play brands.