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Amazon new store: The Laboratory

As one of the guys who helped launch Border.com, I have been watching the opening of Amazon’s first brick and mortar store closely. I have been waiting years for the ironic moment to happen. I once ran into Jeff Bezos in an elevator and told him ‘I just joined Borders and we have been waiting to take you on.’ Jeff replied ‘And we have been waiting for you and who knows, we might just open a store.’

To be honest, I have learned a great deal about merchandising and business from Amazon. Probably the single most valuable lesson was ‘don’t be afraid to cannibalize your own business.. otherwise someone else will’, as Bezos described in the great book Everything Store.

Early reviews of the new store indicates that it has a nice atmosphere, has a good offering of Best Sellers, and that the store personal (some of whom are part-time self-employed holiday workers) often say ‘you can order it online.’ But what is really behind this new store. I am surprised that more journalists are not say ‘what’s the catch.’

And there is one. This new Amazon store is a laborary. It is another way for Bezos to get close to the customer. Just think the types of information they can capture:

  • They can test out their price matching app to see if it can keep up with store information real time
  • They can test out the GPS capability of their app (when it arrives) to test out On-Demand Curb Site Pick Up (like Curbside which lets customers buy products on a smartphone app then pick them up outside of Target stores.
  • They can see how well their online ratings system translates to the store because they don’t rotate books or use the New York Times Best Seller List to determine what to feature like other Bookstores do. Instead, the shop’s selection hinges on Amazon’s
    curation—books selected due to their own rating algorithms. Think about Amazon sharing this valuable info with other stores)
  • They can test out their ability to sell Hardware such as Amazon Echo.
  • They can stick their young associates in front of customers to get face-to-face training

So this might be one case where generating a profit will not matter. (Sounds like Amazon : ).

The company also plans a few other Bricks and Mortar experiments. It plans to be a true Miracle on 34th Street; and open store in New York City. Since Amazon hires tens of thousands of workers during the last quarter of each calendar year, I am sure some of the people behind the counter in Seattle and New York, will be seasonal temps and freelancers. Considering the company has received some negative press recently about how it treats it’s temporary workers, I wonder if how these experts will be treated. Unfortunately, they could be the perfect hire in such a grand experiment as the testing of a book retail store.

As always, I have my eye on Amazon and hope to learn from their experience.

 

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