News that Amazon has bought Whole Foods broke late on Friday last week, but in the intervening days it seems that the company has given all other retailers the incentive they have long needed to look again at how to reinvigorate the physical shopping world.
First up, let’s make no bones about it, Whole Foods plays directly into Amazon’s desire to get into the grocery delivery business: it is the one high-value area where it has so far struggled to make in-roads. But in doing so, it has opened up the door to moving what it does so well online back out into the ‘real world’.
Of course, it is obvious to jump to the conclusion that the physical footprint that Whole Foods gives the online giant – and that includes nine stores in the UK, seven in London and one each in Cheltenham and Glasgow – plays nicely into creating real working stores that use all the tech from its Amazon Go pilot (hell, Whole Foods stores even look like the pilot Amazon Go stores – check out the images!). But it goes much deeper than that.
What Amazon has achieved is giving it the test bed to truly link online and offline worlds and pull together a number of its products. Not only does it give the online retailer access to the high street and a knowledge base of how to run a high street business, it also does give it a place to roll out elements of Amazon Go as it builds up that technology.
It also plays into increasing the attractiveness to consumers of Amazon Alex and Echo Dot – and rival Google Home and Apple HomePod – as it now has the ability to make grocery – and especially aspirational whole foods – a ready part of that “speak and spend” process.
It also feeds into trying to grab a slice of the general grocery delivery business – although, in the UK it is a tough market.
This all paints a great picture for Amazon – and rescues Whole Foods, which was lagging digitally and was on the cusp of closing stores – but it also means that the traditional high street retail industry is sitting up and taking note. Not only is the high street in decline (possibly, the evidence is contradictory at best), but now it is under threat from a new player that has already caused much disruption online.
And when the going gets tough, the tough look at what Amazon is doing and try to fend it off. And they need to.
According to eMarketer’s latest UK retail ecommerce forecast, 58.6% of the country’s digital buyers ages 14 and older— 25.17 million people — will make ecommerce purchases (excluding travel and event tickets) via smartphone this year.
If that wasn’t bad enough, when they do go to stores, shoppers find they have access to more information than the shop assistants themselves.
Amazon’s move to own a niche high street food store may seem like small (organic) potatoes, but it does mark a shift towards the technology of the internet moving into the high street. Amazon is has much to learn about high street retail, but it isn’t going to forget everything it has already learned – if not defined – in the online world while it does it. That is true disruption.
And it will make traditional high street retailers sit up and take note: they can no longer ignore that something needs to be done – because if they do, new players will web-enable the shops and they will die.
But it doesn’t have to be high tech to revamp the high street though. Retailers are becoming more and more innovative with their approach to consumer experience. The “death” of retail is bringing rise to a new trend: non-traditional store experiences.
Athletic wear stores like LuLuLemon and Nike offer free in-store fitness classes like yoga and running trainings on a regular basis, drawing people into the store. Additionally, Uniqulo offers customers a digital runway where they can try on clothes, show off a bit, and get a better visual of how they look in the clothing. These customers aren’t simply trying on clothes and purchasing, they’re having a memorable experience.
The key is to think differently.
