6 Ways Amazon is Improving In-Store Shopping
While everyone marvels at Amazon’s online sales it is quietly building an impressive roster of brick-and-mortar stores. At the beginning of last year Amazon had 611 stores. To put that into context Macy’s has 570 stores. Most of Amazon’s stores are Whole Foods stores but Amazon also has a variety of store formats from Amazon Bookstores to Amazon Fresh supermarkets. With in-store shopping making up more than 85% of retail sales in the United States Amazon knows if it wants a larger share of the retail sector it needs to meet customers where they are and that’s both online and offline.
As Amazon moves more into brick-and-mortar retail since its first store in 2015, a bookstore, it is on a mission to improve the shopping experience. It has made some small and a number of large changes to the typical shopping experience that other retailers may seek to emulate if they prove successful. If you are curious about Amazon’s take on how to improve the in-store shopping experience then consider what Amazing has done in these six areas.
1. Making it easier to discover the best products. In many stores especially department stores it’s easy to get lost in a sea of products. You want to buy a new kitchen appliance but you are wondering if it’s worth your money. That’s where Amazon 4-star stores come in handy. These stores only sell products with at least a 4-star rating on amazon.com.
An advantage Amazon has in moving offline is, it’s easier to reimagine the shopping experience when you are starting from scratch versus trying to evolve after many years of doing the same thing. While lists of “our top picks” and “bestsellers” are used in many brick-and-mortar stores today nothing beats an average customer rating based on thousands or even millions of reviews. Since Amazon has already trained us to look for these markers of trust and quality why not put them directly in stores for all to see?
Picture of a digital price tag in an Amazon 4 star store
While we may enjoy browsing through a store on a Saturday afternoon, we often need more help than we realize to make a purchasing decision. Sales associates are helpful but often the biggest input into a buying decision is what is everyone else buying? How many times have you bought a new pair of shoes because you saw someone else wearing them? Or how many times have you been at a drugstore looking for new lotion and then searched on Amazon to check out the reviews before you bought that CeraVe moisturizing cream you love. If most retailers could start again, and they had a treasure trove of reviews they would also add them into their stores like Amazon has.
Another feature of Amazon 4-star stores is they also have products that are trending in the local area. Since what’s popular nationally may not be popular in your local region this can be another way to boost sales.
2. Improving merchandising. Later on this year Amazon is opening its first clothing store called Amazon Style. The 30,000 sq. ft men's and women's clothing store will sell hundreds of clothing and accessories brands. These stores will only display one of each style. To help you imagine why this is a good idea, think of a crowded store that has a row of the same denim shirts, with three versions of the shirt in each size from small to 3X. That’s a lot of shirts! And all of those shirts are taking up precious space.
Amazon claims by displaying only one of each style it can have more than twice the number of styles on the floor at one time. “This allows us to offer more selection without requiring customers to sift through racks to find that right color, size and fit,” said Simoina Vasen, managing director of Amazon Style.
Only selling highly rated products within Amazon 4-star stores also helps with inventory management. It reduces the likelihood Amazon will allocate floor space to merchandise no one is interested in buying. You can also see that while Amazon is known as the everything store it has taken a curated selling approach across its stores. Amazon could easily open mega stores but has chosen not to. All of Amazon’s stores are relatively small. Amazon Fresh supermarkets, for example, are between 25,000 sq. ft. to 45,000 sq. ft. The average size of a Walmart, Amazon’s nearest competitor, is around 180,000 sq. ft. Amazon likely knows that smaller stores are easier to manage, require fewer employees and they force Amazon to select the best inventory since there is limited selling space.
3. Elevating the fitting room. How many times have you sat in a fitting room and thought to yourself I need a different size or I want to try something else on? You call out for your sales associate but you are greeted with silence. Not sure when your sales associate will be back, you get completely dressed, walk out of your fitting room and grab the items you are looking for yourself. This scenario has happened to all of us and now Amazon Style is attempting to resolve this issue.
In Amazon Style fitting rooms there are touchscreens customers can use to request that a sales associate bring them new items, either a different size, a different colour or a new style. As Amazon writes in a blog post: “Amazon Style completely reimagines what’s possible in the fitting room, turning it into a personalized space where customers can continue to shop a seemingly endless closet of great styles. When a shopper enters their fitting room, they will find the items they requested while browsing the store, plus additional options chosen based on their preferences.”
While shopping at Amazon Style to ensure the items you want end up in your fitting room, all you need to do is to scan a QR code on the item you like and request that it is sent to a fitting room. While in the fitting room customers can rate the items they have selected, then those ratings feed into Amazon’s real time recommendation engine on the Amazon shopping app. Customers can also request that an item they have seen on amazon.com be sent to an Amazon Style store so they can try it on.
Do you like this content? If you do subscribe to our retail trends newsletter to get the latest retail insights & trends delivered to your inbox
4. Improving wayfinding. We have all been there, it’s Saturday afternoon, the grocery store is packed with people and all you want to do is get out of there. But there is one problem you can’t find the canned tomatoes you need to make pasta sauce tonight. If it takes too long before you find them you are going to give up on making pasta altogether and order in. These unfortunate moments where a customer wants something but they can’t find it happen all the time and they impact a retailer’s bottom line.
Now that many of us are used to using voice activated devices Amazon has placed Alexa enabled Echo devices in its Amazon Fresh supermarkets. All a customer has to do is ask a question like: “where can I find peanut butter?” and Alexa will tell you which aisle it’s in. Anything that can save time while shopping in a meaningful way is a win for customers.
Picture of an ask Alexa Echo device in an Amazon Fresh supermarket
5. Adding more personalization. Amazon is attempting to make the offline shopping experience more personalized in a number of ways. In an Amazon Style store when a customer scans an item’s QR code using the Amazon shopping app they are given a number of personalized recommendations for other items they may want to purchase. These recommendations are based on their in-store browsing behaviour and any preferences they have added to Amazon’s shopping app.
“Amazon Style is built around personalization. Our machine learning algorithms produce tailored, real-time recommendations for each customer as they shop. As customers browse the store and scan items that catch their eye, we’ll recommend picks just for them. For an even more tailored experience, customers can share information like their style, fit, and other preferences to receive more refined recommendations,” writes Amazon in a blog post. Amazon is clearly trying to use what it’s known for, it’s data and analytical capabilities, to provide a shopping experience that is different than what is available in a typical brick-and-mortar store.
The use of personalization can also be seen in an Amazon Hair Salon in London. In the one-of-a-kind hair salon customers can use augmented reality mirrors to see what a hair colour looks like digitally before it's applied. It has never been easier to see what green hair looks like on you!
6. Making it easier to checkout. A sneak peek into the future was given when Amazon unveiled its first Amazon Go store to the public in 2018. Amazon Go is a convenience store that was first launched with no cashiers but instead uses machine learning and sensors to determine which items customers have taken off shelves. After customers have finished shopping they can walk out of the store without having to stand in a line at a checkout. When customers leave the store their Amazon account is automatically charged. “Customers have enjoyed the effortless shopping experience enabled by our Just Walk Out technology at our Amazon Go, Amazon Go Grocery, Amazon Fresh stores in the U.K., and third-party retailer stores. The feedback has been fantastic, with customers noting that skipping the checkout allows them to save time and reduce contact in stores,” said Dilip Kumar, vice president of physical retail and technology at Amazon
Not satisfied with only offering the Just Walk Out technology, when Amazon opened its first Amazon Fresh supermarket in Los Angeles California in 2020 customers could shop using Amazon Dash Carts which allow customers to skip the checkout line. Customers use these carts by swiping in using the Alexa mobile app then they start shopping.
An Amazon Dash Cart in an Amazon Fresh supermarket
The carts use: "a combination of computer vision algorithms and sensor fusion," to determine what a customer has placed inside of Dash Cart and how much the customer’s groceries cost. “The cart has some convenient features for grocery shopping, including a screen at the top where you can access your Alexa Shopping List to check items off and view your subtotal. In addition, every cart is equipped with a coupon scanner where you can quickly apply store coupons as you shop,” writes Amazon on its website. Amazon also says that by using Dash it makes "a quick grocery trip even quicker by allowing you to skip the checkout line."