The bricks and mortar store in Seattle's University Village is stocked with 6000 books at cut prices, complete with reader reviews from the website. Books are forward facing with the Amazon reviews below each one and the star rating they received online. It will also stock the books that have received the most amount of pre-orders online. The physical store is also an extension of Amazon's physical collection points, where it has rolled out lockers for physical collection at various points in the US.
The publishing industry is hailing the move by Amazon as a revival of the printed book (Waterstones in the UK also recently gleefully announced it was removing its Kindles 'due to virtually no sales' and giving the space over to hardcover books); but it is merely on trend, according to Deloitte, as new retail models arise out of new technologies and new ways to interact with consumers.
Wired magazine almost goes as far as to dismiss the new store opening by Amazon as a stunt, terming it a "giant billboard" for Amazon and certainly not a reversal of its billion-dollar online publishing and distribution model.
As Wired writes: "It can afford those cut-rate prices, of course, because Amazon Books is as much a bookstore as it is a billboard. Amazon's not suddenly betting big on the bookstore business, and it certainly doesn't need the store to be a success in order for Amazon to succeed. It's better to think of Amazon Books as a giant advertisement. If it makes a little extra money for a $294.7bn company, all the better."
As Deloitte points out in its latest retail report from Deloitte's Center for the Edge, 'Retail Transformation - cultivating choice, experience, and trust', bricks and mortar assets can serve online retailers well as they "serve as a stage for customised consumer experiences that go far beyond ambience to surprise and educate the consumer. Done right, these experiences can become so valuable that they inspire consumers to choose to pay for them".
Deloitte looks back at the transformation of the retail sector over the last century and concludes that change in each case - from village grocer to the high street shopping model to e-commerce, and so on - has been driven by "larger technological and social shifts" and real fundamental changes in how people shop.
"Every one of them increased consumer choice while reducing consumers' total cost in terms of money, time and opportunity."
So we can bemoan about the loss of culture and our trendy little spots, but as consumers, we also want cheaper books and easier ways of accessing what we want. The flip side is that consumers will also pay more for a valuable or worthy experience. Trends are driven and consolidated by human needs. Those needs can be influenced, of course, but we have to want the change.
What Amazon has done is create a huge, real-time customer test house. It wouldn't surprise me if the entire store was infested with camera's and beamed into Amazon HQ as the book store version of 'Big Brother'.
Amazon is clearly working on the next publishing and distribution model and it might, in this case, actually have an impact on the leisure and entertainment industry this time too, not just retail with a return to 'Ye Olde Book Shoppe'!
Deloitte says we are actually entering a world of abundance with all the choice through online retail and distribution. Consumers now create demand and inspire trends. Engaged consumers are the ones shaping brand message these days - so no wonder Amazon wants to observe a segment of its consumers in their natural habitat, 'the book store', to ensure it reaches all effectively.
"In this complex and evolving environment, retailers should fundamentally reassess both their roles and the way they create value for consumers. The retailers that will be most effective in today's marketplace will likely be those that fundamentally rethink the retail experience, developing business models that blend physical, virtual, and community experiences," Deloitte notes, in analysing big shifts in consumer and retail trends for 2015/2016.
The niche, craft, maker movement that is another key retail trend, is diametrically opposed to mass commercialisation, where consumers prize authenticity and real experiences, may be another reason Amazon wants options. Who doesn't love an authentic book store to lose yourself in for a couple of hours?
The end of this chapter has not yet been written.
TRENDAFRiCA is a trend watching portal on consumer insight, research and trends from South Africa and further afield on the continent of Africa. It includes DAiLY trends headlines from around the world, influential Trendspotter columnists and in-depth reports on industry segments. Louise Marsland is the founder and editor.
Go to: www.trendafrica.co.za
