Star Trek, Jeff Bezos and VR helmets – Drayton’s Ian Pickett beams down inside Amazon’s latest retail strategy.
Pop-up stores remind me a little bit of Star Trek. They beam down onto a high street somewhere but, then – after creating some minor fiscal displacement in the retail universe – quickly disappear. Amazon pop-up stores, though, are likely to be different. Jeff Bezos is a man who seems to favour major displacement in the retail universe.
In the past few weeks, Amazon has opened a new pop-up in Edinburgh. One of ten, in a UK-wide strategy. Following on from their recent US purchase of high-end supermarket chain Whole Foods Market for $13.7bn (£9.9bn), these stores seem, in my eyes, to signal a less tactical and more long-reaching strategy based around the very same physical retail environment their critics charge them with undermining.
Ostensibly, the pop-ups are, according to The Guardian, “Part of a year-long pilot, launched in conjunction with the small business support organisation Enterprise Nation, that Amazon says will give 100 small online businesses their first taste of a bricks and mortar presence.” A way, then, of helping smaller companies like Swifty Scooters and Toro Cases, who sell through Amazon, to get face-to-face exposure with customers.
But, I think, something else may also be in play.
In an excellent recent Forbes article, “Bricks-And-Mortar Retail Is Not Dead,” retail consultant, Chris Walton, says “Throughout history, stores have existed for five reasons, regardless of whether they have been physical or digital entities,“ before listing them as ‘inspiration’, ‘immediate gratification’, ‘convenience’, ‘taction’ (touching products), and ‘experience.’
Walton points out that the first three are all easily available through any e-tailer but the fifth, ‘experience’, which he defines as “The memory or social delight of being somewhere,” is not. ‘Taction’, too, for obvious reasons, presents major challenges. What the pop-up stores, then, to my mind, symbolise is Amazon’s simple understanding that they have reached the limits of what a virtual retail experience can offer. That actually being somewhere, in a physical place with real people, is still a competitive threat they can’t easily fend off. Something they are unlikely to ever be able to replicate, even with the fanciest VR suits and helmets. But now, thanks to pop-ups, they can own a physical space and, by doing so, leverage this vital element of the high-street offering for their brand.
Strategically, this will allow them to seamlessly integrate their online and offline shopping, at the most important moments in the retail cycle, by rolling out their pop-up concepts on a much grander – worldwide – scale. From a practical point of view, this means no need to invest in a hugely expensive commercial property portfolio, combined with the ability to magically appear on any high street at any time of year. So, expect to see an army of pop-ups beaming down all across the planet around Black Monday, Christmas and, in the US, Thanksgiving. Allowing Amazon to offer the “Social delight of being somewhere,” albeit on a tantalisingly temporary basis. But, also – and this is key – the ability to park their tanks right on the front lawns of Walmart, Macy's, Sears, and Target at the most lucrative times of the retail year.
“Enterprise to Mr Bezos, shall we beam you up, Captain?” Probably not. Based on his past track record in retail, Amazon’s far-sighted owner isn’t planning on going anywhere.