- Cory Checketts
- On February 26, 2016
- 0 Comments
The internet has been shaping the world’s economy since its introduction to the public. Online entertainment and stores have brought down once giants like Blockbuster and Borders in the brick and mortar industry. With Amazon being the premier online shopping destination in the US, brick and mortar stores have begun closing to try to save money and focus on competing in the e-commerce space. This trend would make it seem like brick and mortar stores would be next on the online chopping block, but Amazon could ironically be the savior.
What Amazon Can Hope To Do Different
To the surprise of many, Amazon opened a physical bookstore in late 2015 after it put many chains out of business. Though Amazon has not made clear its long-term goals of this brick and mortar store, the fact that it invested in one shows it has interest in the market. So what can Amazon do to make its store succeed in an economic climate where others have failed?
Merging hard data with a local touch could be the answer. If Amazon can get an analytical and personal approach working successfully with its physical store it could start a business model that could be a resurgence for the industry. Not many customers, especially those in books, like to purchase from “the machine,” so if Amazon wants to bring a numbers approach it’ll have to be careful to not lose the personal touch and alienate its customers. If the hard data approach does not compromise the personal feel, Amazon will have the opportunity to eliminate a lot of inefficiency that has plagued the book industry in the past.
E-commerce And Brick & Mortar Coexisting
If Amazon, or some other ambitious e-commerce business, makes a successful transition to brick and mortar then we could find ourselves in an economic climate where sellers could use the benefits of both stores to increase their profits. A business could use the brick and mortar store as a showroom for their products to relieve the doubts of a potential buyer. The online store could make orders simple and easy to use from anywhere. If the business model could be created and perfected then buyers would find an enriched shopping experience, while sellers would see an increase in profits.
Walmart is using its brick and mortar locations to drive online sales with its in-store pickup service.Walmart customers can place an order online and pick it up for free the same day. This is an extremely appealing alternative to Amazon Prime. Amazon will have to find a response to this tactic. Though they dominate online sales right now, brick and mortar businesses will be using their substantial capital to take potential profits from Amazon soon. Competition is growing and Amazon will find themselves crowded in the market. According to Market Watch many brick and mortar retailers are growing online faster than Amazon. Amazon also spends a huge amount of their budget on shipping. They could cut into those costs and compete with Walmart’s same day pickup, and traditional stores, by opening their own brick and mortar locations. Amazon is king of the online hill right now, but they’re attracting stiff competition. They may have to find a way to meld online and brick and mortar to maintain their top spot.
When Will We See People Move From Online To Brick and Mortar?
The move has already started. Jordan, a customer of ours, sat down with our team and talked about his push to brick and mortar after achieving a top spot on Amazon. According to Jordan this move was be a big priority moving forward, “Our big focus is taking products that are successful on Amazon and distributing them through brick and mortar.” He already has moved into Cabela’s, Sportsman’s Warehouse and other small stores. His company is testing products in Target and Walmart as well.
When asked about the advantages of online vs brick and mortar Jordan had this to say, “Amazon is definitely the easiest money to be had. Brick and mortar is a whole new beast, but to be totally honest brick and mortar has more of an upside if you can tackle it properly. [It has] stronger sales volume” Jordan definitely believes there is great value in having a presence in both online and physical stores. He even has an interesting approach with how he sees the relation between Amazon and brick and mortar, “People view Amazon as kind of the endgame, but we’re at a point now where we are using Amazon as a tool to get into retail.”
This is definitely against the trend of the industry. During his meeting with Walmart they expressed more interest in his online success, than his move to brick and mortar. Walmart may have its eye on moving to e-commerce from brick and mortar, but Jordan is focused on being a force in both
Will You Move Too?
With Amazon causing a buzz by hinting at more brick and mortar, and sellers like Jordan expanding to physical shelves, the economic climate for e-commerce is experiencing a shift. In a few years we could see businesses fully optimizing both their brick and mortar, and their online stores. Will you build your brand on Amazon and use that influence to make it onto retail shelves? Only the future will tell.