Book to the Future: Amazon's Latest Attempt to Disrupt the Retail Market

“In a world where technological and business model changes are accelerating, finding an opportunity to disrupt – a competitor, an industry or even your own company – is more achievable than at any point in history.”

Steve Guggeheimer, Microsoft World Partner Conference 2015

When you think about ‘disruptive’ companies – the ones who entered a traditional market and, politely or impolitely, revolutionised the way customers bought from it – there is perhaps no company more disruptive than Amazon.

Amazon created the ‘never ending bookstore’ and painstakingly found a way to make the online experience a good one – customer reviews, suggestions based on your current criteria or past purchases, easy delivery methods which would be an acceptable alternative to walking into a physical store and having a book in your hands immediately.

Online shopping essentially had its origin moment.

There are no signs of any sort of slowing down either. According to a Forrester Research study, in 2010 the industry wasn’t expected to top $300 billion in consumer spend until 2017. By the end of 2015 online shopping is projected to reach nearly $334 billion)

So, what does Amazon, the godfather of reinventing traditional categories, decide to do?

They open a retail bookstore.

Granted they haven’t planned a roll out of stores across the globe – this is one standalone store in Seattle (where they are headquartered).

It opened this week with 5000 books in stock, all rated 4.8 or above by Amazon reviewers. Review comments are also shown next to the book, and people will also be able to try out Amazon devices such as the Kindle and Fire TV stick in the store.

Speaking to The Seattle Times, Amazon’s vice-president of Amazon Books said, “We’ve applied 20 years of online bookselling experience to build a store that integrates the benefits of offline and online book shopping.”

So, could this odd about-turn have potential?

There are a few notable examples of companies moving into the retail store space and doing very well. Hotel Chocolat is one. Apple is another.

Apple’s in-store customer service is the stuff of legend. In a leaked memo obtained by the website Gizmodo, the world was made aware of Apple’s training techniques. They place an incredibly large amount of emphasis on training their people into giving customers the best possible experience.

Everything down to body language is attended to. Here is their methodology – handily an acronym for APPLE:

A: Approach customers with a personalized, warm welcome

P: Probe politely to understand the customer’s needs

P: Present a solution for the customer to take home today

L: Listen for and resolve issues or concerns

E: End with a fond farewell and an invitation to return

This summer I wrote about my time at Walt Disney World and how one employee managed to dampen my experience somewhat. The most common beef with shopping ‘in store’ seems to be the customer service, or lack thereof, from the person behind the till. As demonstrated by this commenter on The Wall Street Journal:

“I like Amazon for several reasons. First, I can take time to read what other reviewers have written. I’ve found that this is important to me, as it gives me a good “feel” for the quality of a product.

Secondly, it astonishes me how some brick-and-mortar business stay in business. They hire 18-year old kids for about minimum wage, provide no training, no incentives for customer service. Young people start off excited, but it’s easy to see how quickly that gets lost.

Also (and I notice this too much), why is it when I am ready to buy something, waiting at the register, then the phone rings, and the sales clerk starts helping the person on the PHONE? What’s up with that? I am standing there, waiting for the phone to end. Yes, I do say something, but it just happens too often.”

A few scenes familiar to most I’m sure.

So if Amazon are going to start getting more into the retail space, and in doing so compete against the online version of themselves, as well as the likes of W.H.Smiths and Waterstones etc., how good will their customer service have to be? Pretty awesome I’d suspect.

Speaking of Waterstones, their response when asked to comment on the Amazon news? “We hope they fall flat on their face.” Never wise to poke a sleeping giant…

Anyway, it only seemed appropriate to search online for reviews of the Amazon store in its first week. This one (“I thought the Amazon store was a terrible idea. Then I actually went there”) is well worth a read, but to summarise, the author had a few gripes which led to a less than perfect customer experience.  The main one being no prices on display.

You have to use a scanner in store or open up the Amazon app to see any prices. This is because Amazon pledged the prices in store would always match the prices online, which tend to fluctuate rather frequently so it wouldn’t make much sense to print them out. However it takes a bit of time to scan, and the reviewer couldn’t see why digital displays weren’t used.

However, the curated selection (i.e only the most popular books making their way onto the shelves) was seen as a positive. No more endless searches to find something that has been highly reviewed – they all come with that guarantee. She referred to the ‘paradox of choice’ – where people become too paralysed to choose anything. This is an attempt to counter that.

Generally speaking, it seems there is demand for Amazon to have more retail stores. In this survey by The Telegraph, Amazon came top (by quite a distance) of the list:

What’s interesting though is that the second highest choice was ‘none’ – i.e people didn’t want to see any online store become a physical location.  

If Amazon are successful in their pilot project in Seattle, and they get their user experience right, it seems they stand the best chance of paving the way for the others.

And that wouldn’t be the first time…

Going back to that original Microsoft quote, if companies are to thrive in today’s climate (with access to technology that allows them to compete with the big guys), then finding that opportunity to disrupt is a must.

Have Amazon achieved this by going against the very reason they established themselves in the first place? Watch this space…