Back to the Future in Retail

As you may know, Amazon is moving more and more into brick and mortar. They are opening book stores, while others are closing. They bought Whole Foods, which may soon no longer be referred to as “whole paycheck,” and they are opening convenience stores.

The convenience stores, Amazon Go, are fully automated. You simply pick the items you want and walk out. Using an app, the “store” knows what you bought and they bill you via your credit card. Now that is true convenience.

Amazon is clearly doing what most other retailers have stopped doing and that is understanding what retail customers want in their in-store experience. Different shoppers in different stores want different experiences, and most retailers have stopped understanding that, and their sales show the results.

Perhaps more importantly, Amazon Go is doing something Sears pioneered over 100 years ago, long since forgot and their closing stores reflect it: the vast majority of customers are honest and it doesn’t pay to treat them as thieves to prevent the very few from cheating you. Thus was created the “satisfaction guaranteed, or your money back.” Younger readers may not recognize that slogan as Sears long ago abandoned the idea along with many (now most) of their customers.

Amazon Go gets it, as evidenced by a CNBC shopping experience.  They ended up with a single serve yogurt in their bag they weren’t charged for. They reported it to Amazon and the VP’s response was pure ‘old day Sears’: “First and foremost, enjoy the yogurt on us,” Puerini said. “It happens so rarely that we didn’t even bother building in a feature for customers to tell us it happened. So thanks for being honest and telling us.”

Next time you hear about the demise of brick and mortar, consider what I have said for years: It’s self-inflicted.

Mitch

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