Jason & Scot Show Episode 148 Amazon 4-Star Retail Concept Store

A weekly podcast with the latest e-commerce news and events. Episode 148 is a discussion about Amazon’s new 4-Star retail store, including a trip report from the grand opening.

Subscribe:

Amazon 4-Star, Amazon’s latest brick and mortar retail concept, opened in the SOHO neighborhood of New York City on Thursday, September 27th. The premise that its assortment of merchandise available in the store is rated 4-star or higher, curated by customers, a top seller or is new and trending on Amazon.  Jason was on-hand for the grand opening and gives a first-hand account.   “What Competitors Are Missing About Amazon’s New 4-Star Retail Concept” from Forbes.

  • Overview of Amazons brick and mortar formats to date
  • Description of the Amazon 4-Star Store
  • Digital Fact Tags
    • SoluM is the hardware provider
  • Checkout Experience
  • Implications for other retailers

Upcoming:

Don’t forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 148 of the Jason & Scot show was recorded on Monday, October 1st, 2018.

http://jasonandscot.com

Join your hosts Jason “retailgeek” Goldberg, SVP Commerce & Content at SapientRazorfish, and Scot Wingo, Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.

Transcript

Jason:
[0:25] Welcome to the Jason and Scott show this is episode 148 being recorded on Monday October 1st 2018 I’m your host Jason retailgeek Goldberg and as usual I’m here with your co-host,
Scot Wingo.

Scot:
[0:41] Hey Jason welcome back Jason Scott shirtless nurse well it says you have a special treat for you this week we.
Jeff Bezos says you know is one of our top listeners and he knew Jason was in New York last week and he thought that would be a good time to open an exciting new store
the four-star store in Jason Our Lives always in a city on a new Amazon thing opens a reporter is going to give us a trip report today.

Jason:
[1:10] Yeah I know it’s super excited to talk about a 4-star I’m sad because the last show we were together so now I’m having to get used to the the separation and doing it remotely against God.

Scot:
[1:23] I know I know well I’m sure we’ll see each other next couple years.

Jason:
[1:27] I’m looking forward to it already.

Scot:
[1:29] Cool let’s kick it off by so you know you and I fall asleep closely maybe not everyone else’s is obsessed with the Amazon physical stores
let’s kick it off once you give us an overview of the different store formats that are out there.

Jason:
[1:49] Well so I think the first brick-and-mortar store than Amazon ever opened was probably the Amazon bookstore the original one in the University Center in in a suburb of Seattle.
Now I want to say there are 17 or 18 of the book stores open.
Instead of this is like the.
They do Intex sell books they also sell Amazon Hardware in the store some of the key unique concepts of the store.

[2:21] Amazon has Dynamic pricing their pricing on a line changes all the time they want to offer the same price in the store that they do online so the store has no price tag so you have to use the Amazon app and scan everything in the school or store.
To learn what the price is when you make your purchases you get in line at a traditional cash wrap but instead of paying with a credit card you’re highly encouraged to use,
the Amazon mobile app to check out using your Amazon digital wallet so they have kind of a.
To my way of thinking convoluted High friction.
Checkout experience and I expect we’ll talk about that more and there’s a lot of speculation about the purpose of those book stores.
It it seems unlikely to me personally that that Amazon has identified the dead tree book category is a category where they desperately have to get more market share than they were getting online and so they open.
Book stores because they thought that that was the category the world needed more of my my promise has always been,
that Amazon has these really successful Hardware products like the Echo and the fire and the day recognizes that they needed a demo environment in a customer service environment for those and that the the books were kind of.
The decoration around the Amazon Echo Store if you will.

Scot:
[3:50] And then what other formats are there out there.

Jason:
[3:55] So a couple formats cropped up after that.
Amazon head-to-head Amazon Fresh for a while and today you want a couple of these Amazon Fresh pick up locations in Seattle so these were,
places where you can order your groceries from Amazon Fresh and instead having them delivered you could drive through almost like a bank teller.
I drive through bank to our kind of situation and they would put your groceries right in your trunk,
they’re very fast service level so you can get your groceries delivered like 30 minutes after you place the order these two stores.
Open shortly before Amazon bought Whole Foods so this at one point was there.
That you know what like the tip of their Spear of their brick-and-mortar grocery strategy and then of course they,
they are upset the industry by actually buying a brick-and-mortar grocer.
So they they have of course they have the Whole Food stores is another Amazon format and they,
they made a lot of progress in digitalizing I think I just joined a new version of that were there.

[5:03] The grocery store so prior to the acquisition you could not find out what Whole Food carried in the individual store you cannot see inventory now you can shop the whole inventory of all the Whole Food store,
they’ve added a ton of omni-channel feature so you know Whole Foods delivers.
In many markets they have curbside pickup I would very fast service levels in in mini markets they’ve integrated
Amazon Prime into the Whole Foods experience so you you get discounts on product of your Prime member and you are now using,
your mobile app in your barcode to get that Prime discount when you checkout at the front Whole Food store so Whole Foods is there only one of those Concepts and then.

[5:47] Inside of many of the Whole Foods Amazon has a hardware pop-up shop and so there now 37 or 38 of these Amazon pop-up switch is a,
format you know. Dedicated to the Amazon Hardware so that’s mainly Echo fire ring,
antonym of amazonbasics products and as we know that those are all expanding lines they’re adding new skis used some of these pop-ups are not in Whole Food stores,
and then not included in that count Amazon has also done a shop and shop inside of a bunch of Best Buy stores that has a lot of these physical things,
so those are is far as I can remember where the main,
Amazon brick-and-mortar formats leading up to this this new Amazon 4-star store that just opened in the Soho neighborhood in in Manhattan.

Scot:
[6:43] Cool so it’s good over you so give us an idea of what.
What it’s like when you walk in this thing
one thing I saw online a lot of people are not questioning the name for Star it’s almost kind of like why not just have five-star stuff so I would love to hear your thoughts on that and then you walk in and give us a lay of the land is a
categorical or some people say it’s a bunch of random stuff I would never buy just kind of all jostle together I love to hear your kind of like a little tour of what you saw there.

Jason:
[7:16] Yeah they got some merchandising is currently in the eye of the beholder we haven’t explained it to her listeners
the concept behind the four star store is that everything in the store has earned four stars or more on the Amazon platform,
or is a hot seller or is a new and trending products,
so it’s essentially it’s their taking these products that are doing really well on the Amazon e-commerce platform and putting them in a physical store format and so yeah you know.
Haven’t given a lot of thought to the name the.
You know you’re right like it’s open a misinterpretation that it’s tough that’s rated for not five-star it if it really is meant to be four star and above.
In many of the products in their likely aren’t 4-star because they’re their new new trending products as well so so the.
The merchandise in the store is a little broader than the name might imply it’s a 4000 square foot store which of the similar footprint to the book stores,
and the physical fixturing in the store in the signage in the graphic elements are all very similar to the bookstore so if you shopped a bookstore the.
The visual merchandising in the the four-star store with feel very similar to you.

[8:42] There there’s One Merchandising element that’s dramatically different and we’ll get to that in just a minute but the main thing that would feel different about the four star store from the book stores is.

[8:54] Quite simply the merchandising assortment that is in the stores and in fact you actually can see some of the.

[9:03] The Fingerprints of this store in the earlier book stores so in the book stores.
At some of the unique gondolas they had four books is they would have a gondola just for books that were rated 4.8 stars or above,
at the time that was a novel concept that that you know that they had a merchandising display unit dedicated to well-reviewed products and then they also had a gondola for stuff that was rated 4.6 stars and above,
my New Yorkers for the store in New York so they had Us store that had you know that was very sensitive to.
Well reviewed products from other people in the same Market is you and so in a way you can almost think of this door as taking those couple of innovative displays out of the book stores and turning them into a,
a whole brick and mortar store there is very very clear wayfinding so the.
You like that the signs for the categories of products are pretty clear and in so you both have sort of tables that have things like,
new and trending products you would we have a category for like,
products at 10 to get purchased together you have a table for things that are hot in Manhattan you have those kinds of.
Of curated assortments based on on on ratings and reviews and user-generated content.

[10:30] On tables in the middle of the store in the most of the walls of the store are little micro categories so pet products or travel products or kids products,
and then there’s a couple big category so they’re their there are tables that are dedicated and labeled as Amazon product separately there’s a home automation section,
there’s a fire section,
there’s a big section in the middle of the store that I’m pretty sure is a vendor funded display that’s for the the the iRobot.

[11:10] Artificial intelligence vacuum cleaners.
And so you have a bunch of these categories and I think it’s toy fair to the unit people that walk in and say hey it feels a little hodge-podge G disorienting.
To me what that is is you got a.
A category of pet products sitting next to a category of travel products right and you you know there’s there’s not necessarily.
In an obvious association between those two categories and yet they’re their merchandise adjacent lie in the store.
I’m not sure if I mentioned it earlier but they’re even tables for things like amazonbasics cookware for exam.
So that the assortment can feel a little.

[11:58] Random the or or you know there’s some objects of positions of the assortment but in a way that’s one of the things that’s interesting to me about the store,
you know ink increasingly we talk about stores like Amazon’s website as being the.

[12:15] You know the absolute winner at things like a sort mint and convenience and priced and so we talk a lot about you know the best play for a lot of other retailers is to be at the other end of that spectrum mbn that sort of.
Accuration in Discovery into the Spectrum where you you know you you could be surprised and delighted to discover some new product that you didn’t even know you wanted,
did the retailer help you find and none of the previous Amazon Concepts were really very good at Discovery and certainly Amazon’s website you know has not been successful at Discovery,
yeah they’ve done the number of Pilots including one we talked about last week the the Amazon Scout experience to try to get better Discovery but that’s always,
been sort of a a gap for Amazon and it’s it’s been one of the.
The plays you seen a lot of other retailers do to try to compete against Amazon and so now you have this new store format that I do think,
has a strong element of surprise and Delight but if you went in there to shop for Amazon products if you went in there to see the new echo or to see the the the microwave oven which side note it’s not in the store yet.

[13:28] You you would discover some other products that are highly rated that a bunch of people are buying on Amazon that you probably didn’t know existed and said there is that kind of fun element of surprise and because it’s a broad assortment
a lot of people point it out like you know it’s a pretty it’s a particularly good assortment if for example your shopping for a gift for someone because there’s
a wide variety of different things for people with different tastes.

Scot:
[13:54] Coop’s what,
we’ll see where this was the biggest swell a lot of people in New York love that store called story that you know,
Angels kind of every quarter that has a theme of the tend to be seasonal like around. X day it’ll be love and home
Macy’s acquired that I believe and then that’s a store that’s like really just focused on Discovery and then we’ve had beta on the show where is really around device Discovery at what time is the Apple Store you can have that time.
How would you kind of rate this and that Spectre mode stores oriented towards discovery.

Jason:
[14:37] So it is much closer to the,
the sort of beta end of the Spectrum in in fact I would in some ways that share some common strengths and challenges with the beta format right so
you know like Bay that you’re your apps to discover some new stuff when you walk in that store that you didn’t know existed and that’s great but will I get beta,
there probably aren’t a lot of customers that have a particular product in mind.
And then are going to go to the beta store to fulfill that particular product right so you know to me one of the challenges with the beta format is it’s very strong if you just want to discover something you didn’t know existed but it’s it doesn’t you know,
do particularly well as a destination for products I already know I need.

[15:25] Into what’s interesting about this Amazon 4-star is it does have a little bit of both like a view
new that you’re all your friends were talking about Echo and you finally want to jump in and buy an echo or do you already have an echo and you want to learn about more home automation products that you can integrate with your Echo,
this store is going to be your destination they have the broadest assortment they have in staff
Nina in-store people that are trained to teach you they’re doing in-store demos and things like that and so it is your demo for Amazon products and then you’re going to have that beta style Discovery experience,
around the Amazon products so in that way it’s a little bit better of a blend you did you mention story Into Me
story also is a very much a discovery experience but it’s a much more,
carefully curated Discovery experience so.

[16:20] Everything in story is going to fit into a single theme in that theme is going to change every couple of months or every story is they call it right so you know if it’s a,
a local food base theme all the products in the store are going to be related to local food and how to prepare it and shop for it and buy it,
until there is a cohesive theme and you know the the cohesive team in beta is sort of tech gadgets if you will,
then you know that there really isn’t as much of a cohesive theme in this Amazon store it’s more of the decoration bye bye rating,
plus all the Amazon products but I do think.

[17:03] This is going to end up being a destination store that’s a mission for people that decide they want to buy Amazon products if you want to see that microwave oven before you buy one,
I think this door is clearly going to be your destination if you if you live in the New York area and then it is going to be.
Another store in a popular shopping district in SoHo that people just want to go into brass and see what’s new in hip and they’re going to expect to see fun new stuff every time they walk in the store and compare that for example to the,
the world’s most successful retail concept Apple,
like I would argue that there’s very little fun surprise when you walk into an Apple Store I mean you know when they first want to take care of a lot of third-party product but as they have launched more of their own products they really.
Apple is really narrow the assortment to just stuff they sell and when they you know bought beats they said they didn’t want to sell other people’s headphones very much and so,
in general all the products in that Apple Store are Apple products and they change at best once a year and so you’re really surprised when you walk into an Apple store that you’re going to be able to walk into this Amazon store
you know it certainly every couple of weeks and in discover some new stuff so that’s an interesting play for Amazon.

Scot:
[18:18] Go see you’re getting you got the vibe they’re going to be changing this products pretty frequently like where they like running around like oh my God this is now below for stars and here’s the new thing in this is hot and turned in her.

Jason:
[18:29] Yeah I definitely don’t get the sense that is going to be real time but I think they are committed to two very frequent product refreshes and that certainly is one of the things wall,
will want to watch.

[18:41] The I hinted up front that there’s that the merchandising mostly feels exactly like the Amazon bookstore but there is one dramatic difference between,
the book stores in this door and that is that this door.
Uses digital displays are what we call Electronic shelf labels or sometimes they’re called electronic fact tags.
In front of every product in the store so there’s a little e ink display in front of every product and what that lets the the Amazon 4-star,
store do is it let that store show that Dynamic price in at that price changes throughout the day,
the prices updated on that on that ticket in real time and of course in addition to having a price on that ticket
they also show the average star rating and the number of reviews that every product has got it has and so since all of those things are kind of real time and can be changing on the website all the time,
it makes sense that they went to a digital display in the store so that you get that updated information so it’s not so much,
but they’re changing products out every single day but at the very least they’re updating all that information about the products every single you know our,
and then interchanging out the products fairly frequently.

Scot:
[20:02] Is it you know when you say this I imagine like a little candle kind of cut to fit on the Shelf is like is it an Amazon product they’ve made for this or is it a third party.

Jason:
[20:14] It is not it’s a third-party product so there’s a.
Vibrant competition out there for these fat tags some other retailers use them Whole Foods interesting enough was an early adopter they use them in some categories like the beer category.
Kohl’s has deployed them pretty much everywhere in New York City there’s a very popular photography store.
That’s a e-commerce site to the rest of the country which is called B&H Photo and they use all these fact tags the in many states,
if the price of the cash register is different than the price on the Shelf the Retard gets fined and so one of the reasons that a retailer might want these electronic fact tags is to guarantee that the cash register price is always.
To the shelves into a lot of retailers particular in Europe have deployed this technology just to protect themselves from that kind of Regulation,
I’m in consumer protection laws but increasingly we’re seeing that you can also use these digital fact tags to give customers a better experience and if you’re someone that’s going to change prices frequently.
Frank Zappa Warren Buffett owns a store in Nebraska called that are in Omaha, Nebraska Furniture Mart.

[21:27] They they sell a it’s a huge Furniture campus but they have a 50000 square foot consumer electronics store that’s kind of like a Best Buy in it,
and that store spreads all their competitors prices every morning and they update the price on everything in the store to be lower than any competitor and they do that using these digital fact tag,
so we’re trying to see him,
yeah it is a display technology that’s very similar to the Kindle and I did do a little spelunking when I was in the store and and their particular solution comes from this this Bender called,
so um I’ll put a link to to their products in the in the show notes but it’s s o l u – m.com.
And you know typically all these vendors make a wide variety of sizes they have some color capabilities so you can add Getty ink in like three colors,
but mostly what Amazon’s using our bar kind of the least expensive products in the in the line so they’re the two smallest format tags than Amazon’s using and they’re just black and white.
These things are run on a battery they clip to a shelf just like a paper sign would.

[22:38] Store updates prices on a server that talks to all of them you use a mobile phone with Wi-Fi to update pricing,
and then there’s a zigbee server which is a flavor Bluetooth that used to actually update all the all the individuals back tags in the store.

Scot:
[22:58] White so I have been in an Amazon bookstore and their you kind of used app why do you think they’re using this instead of the app based approach.

Jason:
[23:07] Two reasons number one like I would if you actually go back to our bookstore first first show I suggested back then that I was surprised Amazon wasn’t using electronic fat tags in the bookstore because
I felt like forcing customers to use the app is a.
High friction experienced some customers will do it some won’t but it’s slower and you know customers shot the store they don’t have the app and so,
I was kind of surprised they didn’t have fat tag Justice all the pricing problem but now in this poor starving store they’ve doubled the problem because they had that they have the dynamic pricing problem but now they have the problem of showing you what the ratings and reviews are
like that’s the whole premise of the store and so they can’t get that social proof available for every product than that’s you know,
it’s hard to deliver on the on the promise of the store and so I think they needed the fact tag to have the real time updates of the of the the star rating,
and the dynamic pricing and so you know I think that that’s kind of cool I’ll bet you we don’t see any new book stores open that don’t have these,
these these tags in them and I’ll bet you if if Amazon does deploy this this format a little more broadly that it’s another nudge to a lot of other retailers because once you,
have the ability to see the star rating in the store for a product.

[24:31] You really want that everywhere and you you certainly want that at Target and Walmart and you know once once the expectations are raised that you can easily get that like I think a lot of other retailers are going to have to.
Have to match that capability and are least I certainly hope so.

Scot:
[24:46] Cold out how often do these things update like when you’re in the store did you see them updating or you think it’s like that once a day thing or.

Jason:
[24:52] So I didn’t I didn’t see any updating I didn’t have the patience to stay the same
United change a review and see it see a change I pray I should have done that in hindsight
in my mind I I know if I’m working with these tags that it’s totally viable to change the price multiple times a day so I just imagine that they’re probably refreshing the tags every hour or every,
couple hours in the stores you don’t want to constantly refresh him cuz they are running on a battery and so for example if you.
If you updated every 10 minutes or something that you know that the batteries would would last considerably last time.
These tags actually don’t use any power when they’re not being updated so one of the benefits of the E tank is it needs electricity to change but once it changes.
It doesn’t take any power to two.
Keep its display State and so then when there’s igby goes to sleep you basically have a tag that’s that’s electric but isn’t isn’t drying any power from the battery which is pretty clever.

Scot:
[25:54] I kind of believe V Amazon 6S for mandevilla themselves cuz they’ve got all the underlying technology and.

Jason:
[25:59] I’ll be totally honest.
Yeah I’m familiar with the number of these tag manufacturers I was not familiar with this particular manufacturer and I was somewhat surprised when I you know
climbed underneath that is playing was looking at the back of these things to see the day they were a third-party product I tend to agree with you I can feels like something,
you think Amazon would have engineered and then maybe potentially sold the other people.

Scot:
[26:26] Did you get arrested.

Jason:
[26:28] I did not get arrested.

Scot:
[26:31] Did you get caution to the work of the lake sir sir get down from that ladder.

Jason:
[26:36] I feel like I have this whole skillset about being really slick and smooth and retail stores and and you ain’t getting a little another Eyes Photography and stuff and it’s mostly wasted skill now because in the old days,
they tried to catch you and they really frown on that like now like every single person in the store is taking pictures for Instagram and what not and so.
If you like being stealthy is a is a valued skill in the stores
I will say One Missed opportunity I was really happy to see the digital fact tags he missed opportunity is what you can also do on those digital fat tags is you can throw an NFC chip,
inside of the fact tag.
In effect this manufacturer even offers that as an option and so is we we covered last week the newest Apple products can now read NFC chips with in the background and so what that would mean is.

[27:33] You shop this door you see the price you see the number of ratings and reviews and you could take any Android or any brand new Apple phone and just wave it in front of the price tag and it could open the Amazon for the detail page and let you actually read the reviews for example
and so to me that would have been a nice link,
to the customers mobile device for the people that want to do a deeper dive or at the very least Amazon owns their own 2D barcode technology called smile codes you would have expected,
there to be a smile code you can scan for each of these products in at least so far they they have not gone that way so maybe that will be there next door concept is though,
the lad smile codes in the NFC chips to the to the digital Factory.

Scot:
[28:17] Someone told me on the tag anyone can shop in there but it will actually highlight if there’s a prime discount so there’s certain things that were either Prime exclusives our heads exclusive Prime discounts did you see that.

Jason:
[28:29] Yeah I did not notice any Prime exclusive but I did notice product that had a prime discount and so then the tag use this kind of is was format and said they say like with price.
You know 1999 Prime price 1599 or whatever.
So you could see that that you know and they they this store like I got you know I didn’t count how many skus are in the store but like it it,
it would not Shock me if 40 or 50% of all the shoes in the store are Amazon products between Echoes Kindles fires.
Amazonbasics you could easily imagine that have two products in the store Amazon Prada.

Scot:
[29:15] Sagittarius fortune.com.

Jason:
[29:17] You you may yeah usually I have a muted for podcast but because we did a special episode tonight I decided to leave her on and she’s punishing me for it.

Scot:
[29:25] What else can you highlight about about the storks prankster.

Jason:
[29:34] So the instapot was prominently featured I know that’s a super product Everyone likes to talk about the.
They did have some digital displays for some of the Amazon product so.
Particularly for like the the ring doorbell displays they they had a button you can push that was built into the table and they are like a 20-inch monitor built into the table and they played a video sort of.
A demonstrating the the the ring value proposition to customers and said that you know these were these richer interactive tables most of the Amazon products.
Out and available for customers to try and use and then tried to set up good demo environment for all these products.
This is all live merchandise so all the Amazon or non Amazon products if you wanted to buy something you you grabbed it on the Shelf there’s an inventory on the shelf and you will you walk to the cash register and and buy it yourself.
The.

[30:37] You know so in general I walked in that store and I might go out you know this is a more fun store to shop then any of the previous Amazon Concepts I’ve been in pain so I thought that was really favorable and I actually think.
The idea of merchandising the store based on customer social proof is really smart and I think it’s very smart for two reasons.
Does ratings and reviews it become like the most persuasive attribute in selling stuff online and and you know there’s a lot of studies that each other like 2nd or 3rd behind price as the,
the primary attribute to customers care about Amanda cases they’re more important attribute than the brand name.
Anythink gosh all those ratings reviews are ubiquitous available online they’re not available in any brick-and-mortar format right and so who’s the first retailer to figure out how to leverage ratings and reviews in a brick-and-mortar store.

[31:30] What a surprise it’s Amazon I think that’s really smart I think a bunch of other retailers are going to.
Have to move in that direction and we’ve also talked on the show a lot about this trend of moving away from.
Sort of intuition bass merchandising to data-driven merchandising right in historically,
you know if you were opening a store that was going to cater to gift-buying you’d hire some Merchant and they would you know be responsible before deciding what Pool Products They Carried and they would use their own intuition,
and if they did go to,
new product trade shows and they look at stuff and they say I want that bad in that and I don’t want that bad in that and it would be entirely based on their own previous experience and intuition,
I’m increasingly we see some of the really successful online retailers like Amazon and Stitch fix.

[32:20] Replacing those merchants and their intuition with data scientists and their evidence and so you know now you got an example of a brick-and-mortar store that’s largely curated.
Based on data in this case review data rather than the intuition of a merchant and so you know again,
traditional retailers probably look at that and look down their nose at it but I think it’s the direction that retail is going in and it’s not not wholly surprising that that Amazon is.
Pushing pushing the world in that direction more so than then you know we need traditional retailers currently.

Scot:
[32:58] Calypso summarized by give us like a couple things you loved in a couple things you hated and then what do you think this means for the future of retail.

Jason:
[33:08] Favorite things like I think the overall concept of of merchandising based on social proof,
I really loved I loved some of the the clever cross merchandising categories like you know things that are frequently bought to be together like that’s that’s not a.
Merchandising approach you I’ve ever seen in a in a physical store before so I I liked some of those obviously I really like.
The electronic bag tags in and letting customer see you live ratings and reviews in the store,
and I I love the the surprise and does Dwight element in the fact that you don’t know in advance everything that’s going to be in that store and you might might discover something new so to me those were all the,
the big wins the thing I hated is,
that the checkout experience as far as I’m concerned totally sucks and I think I think they totally missed it it it is the same checkout experience at the bookstore but I didn’t like it in the bookstore and now I think it’s even more acute,
in the store where they have a higher velocity of purchases and more skus so.
You get to the front of that line and the clerk wants you to open up your Amazon app.
And go to a bar code reader in the Amazon app and scan a barcode that the clerk has at the point-of-sale counter so the first problem is.

[34:29] You may not have the Amazon app installed.
If you do have it installed you didn’t need Wi-Fi or cellular connectivity which they were actually having problems with cellular connectivity in this store.
If you’re both of those then you have to be smart enough to know that the way you check out is by clicking the camera icon in the app which is totally unintuitive.
That’s arguably the most stupid thing I’ve seen since Amazon since Windows put shutdown on the start button.

[34:57] So I got to click the camera I get the barcode reader I scan the barcode that Amazon provides me and then that generates a new barcode on my phone that then the cork has to scan so it’s a handshake the barcodes.
Which is.
There’s some potential security arguments in favor of it but it’s really convoluted in high-friction and it just watching people check out it felt like I was sitting in line in The Genius Bar watching,
watching the Apple Genius you know folks trying to help people with problems on their smartphone and they were having to do like tech support for every customer to help them check out.
And you know I found myself just saying like geez can’t you guys just use the.
The barcode reader in and swipes on credit cards here cuz it would be much faster and more pain less than this was an.
You know that the huge huge irony of course is that the Amazons store format that gets all the buzz,
is Amazon go in the whole value prop the whole premise of Amazon go is,
we make it really easy to check out and so then they had this other really interesting format and Amazon for star and the one thing that they get wildly wrong as it’s the world’s hardest or to pan so I guess that’s.
That’s a room for improvement for Amazon.

Scot:
[36:12] And what so you luck the checkout what’s this mean for the future of retail.

Jason:
[36:21] Yeah so remains to be seen whether you know this is something that Amazon’s experimenting with where it’s you know there’s a way to look at this and say,
this actually is just an evolution of the bookstore that you know I opened up by saying that my own personal theory is that the book stores are really about selling in Deming demonstrating Amazon devices and in the same way Apple had to open their own store stat to increase their,
their market share with their products and you know we see bows and a lot of other people have their own stores to tell their own product stories.
Amazon need their own stories to tell their product stories and this is just a.
AA higher-margin more interesting version of of what they launched with the bookstore and so that’s true it wouldn’t be surprising at all to see if we of a few hundred of these.
The stores you know in in in some. Of time and if that happens then I think a lot of the best practices with his from the store are going to become consumer expectations that a lot of other stores are going to have to match,
if it just stays as a novelty in New York you know I think it’s it’s something that the.
The retail Talking Heads like you and I will talk about but you know it won’t necessarily.
By itself Drive new customer expectations and therefore Force other retailers to evolve.

Scot:
[37:45] I am,
I forgot twinsies did you get any vibe that it’s I’ve been down to Soho there’s a lot of popups like down there and that it’s pop-up or did it feel permanent did anyone talk about that.

Jason:
[38:00] Nope not today very explicitly said that this is a permanent store and not going to be a papa but you are right like there’s a lot of similar stores.
In that neighborhood that are sort of medium ish turn pop-ups that might be there for 3 or 4 months.
Google opens a store over Holiday Inn in a very similar space.
But this this feels like a permanent one in again like there’s a few bucks or they’re under construction so they may may be very similar to the ones were familiar with better that you know the next book store do they plan it open.
Yeah I won’t be surprised if they’re four star stores instead of bookstores or or you know a closer blend between the two like this just feels like Amazon evolving their own format for merchandising their own products and I think there’s a,
a lot of logic in in Amazon doing that.

Scot:
[38:52] Yeah and you know relentlessly analytical so I’m sure they’re taking those you know that 4000 square foot is split up into sections and they know the revenue per square foot per day,
etcetera and I bet they’ll have that as an input into your comparing this format versus all the other ones and and their it feels like they’re iterating towards something that you know is an optimal store.

Jason:
[39:18] Oh for sure and I’m sure part of the reason they’re so adamant about getting you to check out with the App instead of a credit card is for that analytics right when you check out with that app
they’re they’re able to associate you and all the shopping you did in that store and what you bought and what you didn’t buy with your Amazon account and all your history and so you know I expected the
did they’re taking it very hard look at that data and that’s part of the reason that you’re highly discouraged from from using an anonymous credit card when you check out there.

Scot:
[39:49] Did you see any instrumentation like her cameras or anything that could be you know kind of go like technology at least kind of seeing which part of the store you went to or anything like that.

Jason:
[39:59] Nope they have some and I wish I would have needed a ladder to find out the vendor but they have traditional,
retail traffic monitors in the store and not just in the front of the store so to your point like they’re probably able to do heat map to the whole store but these are like.
Mortified webcams in a in a security case and so they are great for understanding traffic and dwell times and things like that,
but they weren’t near dense enough to resemble the sort of Amazon go Style,
attract everyone’s face you know perfectly throughout the store and the store doesn’t fact have a public bathroom which is one of the things we talked about you you can’t do in a ghost or if you’re trying to track the customer perfectly at all.

Scot:
[40:43] Last question did you find anything exciting that you bought.

Jason:
[40:47] Well so I did I was traveling and I too I try to travel light and so I couldn’t buy anything big but in all these new store formats in the go store and then again in His Four Star
format they had some branded merchandise and so I’ve been buying the permanent shopping bags from all the different store formats and they have.
This sucks steel water bottle with Amazon graphics on it and the name of the store and so you know now I have one from.
Go and and four star so I feel like I’m starting an Amazon brick and mortar retail collection.

Scot:
[41:24] Rick will have to put those in the show knots loves you.

Jason:
[41:27] Got it I wasn’t happily upload some pictures.
But Scott that’s probably going to be a good place to end this Amazon 4-star special edition of the Jason and Scott show
as always if people have questions we didn’t cover or you finally disagree with anything that we said on the show we’d love to hear from you on Facebook if this is the show that that finally pushed you over the edge
take the extra 30 seconds to jump on the iTunes give us that four star review or five star review either way it would get us in the Amazon store so,
we would certainly appreciate that in a special shout-out to all our new Spotify listeners this is the first episode going live,
on to Spotify along with all the other podcast formats that we’ve always supported so happy to have the team Spotify in the the Jason and Scott show Family.

[42:23] Until next time happy commercing.

Speak Your Mind

*