Data as to what is popular and implementing “If you like” suggestions in physical stores is very smart. Don’t forget a bargain book/cocktail table book section to simply catch browsers’ eyes. It’s my favorite bookstore section.

This news is somewhat tempered by the news from Google yesterday about its use of data to track online behavior to physical retail purchases. If that is successful, Amazon may not be the only giant killer in tying online activity to in-store purchasing behavior.

Online selling based on algorithms is a lot easier than physical merchandising. Amazon will use this towards their goal of being the only retailer that consumers will need. Discovery and the sensory, tactile experience of the physical store or engagement center can drive brand engagement, which is the basis of Amazon’s growth and its supply relationships. So success for Amazon in physical retail is measured by “what we learned, how fast we learned it and how we optimized based on these learnings.” The interfaces with information and the way that Amazon engages communities of interest will be the most interesting areas of development.

When e-commerce was initially launched, you may recall that it mimicked real-world experience but in a digital world. As certain characteristics of the digital world became more apparent (i.e. the ability to track customers and gather behavioral data), the online experience changed. Historically, real-world retailers have been lacking in (real-time) data compared to online. As this changes, you will see the experience change. It won’t be Amazon’s influence per se but they will be a prime example. There is an entirely new generation of consumers growing up digitally native that is expecting a different experience. Just ask my five-year-old son who went up to a paper city map and tried zooming in by pinching his fingers together.

There is even more here — keep in mind Amazon’s Go store platform actually has you use the app to enter the store. That means it has much more than simply purchase history — that means it can determine the amount of time dwell you spend in front of items as you browse the store. It means they can connect all virtual and physical purchases under a single profile. It means they can augment their physical locations with the data gleaned and mastered in the digital world.

I think this will be a successful venture for Amazon. Customers desire personalization and Amazon does a great job of turning Big Data into a physical experience that is highly tailored to the customer. Amazon customers buy books online for the convenience and reviews (which is another convenience because people have already done the research for you). By putting the reviews front and center in the stores it’s still not as convenient as delivery, but it’s putting the magic back in bookstores and providing more value than before. The future of retail consists of employing creative strategies like these that humanize Big Data. Because in the end it’s real people who are buying the products so your analytics won’t be as valuable without a humanistic approach to how they’re used.

I’m not too inspired by words of wisdom from the only surviving bookstore in town. The brick and mortar retailers that are not funded by banks and investors to find profitability must face entirely different obstacles in the current 21st century’s hostile competitive market. The data they are looking to increase sales with comes from out of stock reports, cost of goods sold reports, open to buy reports, shrink reports and the usual assortment that may be unique to their retail market type. In the search for new relevance and results-oriented reports, anything that will get more consumers in the store(s) is the need for the now.

I have not visited an Amazon book store yet, but I believe they will be successful for a few reasons and also with one caveat. The caveat is that in brick and mortar is still all about location, location. location. So if they choose good spots they will do great. Not sure that an Amazon Book store will be a destination that anchors a place so they need to choose wisely.

They will be successful because:

1. Using mix of “data with heart” is a great way to use tech and people for an enhanced experience
2. They truly have an endless aisle with every other title under the sun available if not stocked ready for next day delivery or incentives for people to buy Kindle or Audible version and then upgrade to Kindle or Alexa for better experiences.

Other retailers especially omni-channel retailers should certainly pay attention and learn from Amazon on what they are doing to be customer-centric both online and in stores.

Retailers have always sought to draw on insights to strategically locate items in-store, with insights ranging from anecdotal and “gut feeling” instincts to big data driven analytics gathered from point-of-sale customer data. Few retailers have as much big data as Amazon.com, and Amazon’s deep experience in analyzing data trends and in guiding the customer experience will play well in their success in the physical world.

Amazon’s ventures – not just in the physical bookstore, but in other brick-and-mortar ventures like Amazon Go – represent a new type of seamless online/offline convergence that other retailers must appreciate and embrace, or perish. This seamless convergence is at the heart of understanding the emotional triggers that cause consumers to buy, and to remain loyal to a retailer.

We’ve reached a state where it’s not a choice between online retail or physical retail, rather, it’s about achieving an equal balance that meets the emotional needs of all customers in a very personalized way.

I think Amazon is perfectly positioned to do well in brick and mortar, even when others are closing stores and slowing investments. Amazon has a wealth of data that gives them a good idea of what shoppers will want based on past purchases and what other shoppers have bought together. In-store shoppers want to know what others think of products, so showing them easily instead of them having to do the research of their own is a step in the right direction. These are things that employees used to tell shoppers: what new products they might like, what’s popular, etc. Now Amazon is employing data for that role, making it more of a science than an art. Since this new store is Amazon’s 7th, clearly this model is working well for them.

Great comments here. For sure, Amazon has huge assets as most have pointed out: customer data, scale, and brand equity. Yet, it takes a lot more than data to be successful in brick and mortar, right? I am curious to see how many product segments this can translate to. And can Amazon foster the culture at their stores required to attract great employees who will create positive experiences (Apple/Starbucks)?

In the past, Amazon has had its own struggles attracting the needed talent — in their FC’s, for example. At the least, I see some strong residual benefits associated with having a physical presence in communities if they can avoid the potential onslaught of reverse logistics. I very much look forward to seeing how this plays out.