Amazon: Lets get Physical


By Georgie Griffiths – 23 October 2018

Despite being synonymous with online retailing, the opening this week of an Amazon pop-up store on London’s Baker Street and the successful launch of its 4-star store in New York last month has accelerated the presence of the digital giant in the physical retail environment.

The London shop will not be offering the type of items for which Amazon initially became famous; books, electricals and household items. Instead, it will focus on one of the biggest challenges for online retailers: fashion. Selling clothes online is a problematic process which entails high logistics costs and the curse of returns as shoppers order multiple items but send back most (at a cost to the retailer).

The media tells us that the pop-up is ‘an immersive experience featuring on-site stylists and highlighting a different category of Amazon’s fashion department every other day’. Brands available will include Calvin Klein, Tommy Hilfiger, Vans, Levi’s, Paul & Joe, LOVE Moschino, Aldo, Antik Batik and Filippa K plus Amazon Fashion’s Private Brands such as Truth & Fable and Meraki.

All products can be bought in store, or virtually purchased using Amazon’s ‘SmileCode’ scanning technology via the Amazon App. There is still the option to have your purchases sent to your home, workplace or Amazon locker collection address, but the buying process is hugely streamlined by the customer having made a ‘real life’ purchase decision – which should almost eliminate the spectre of returns.

Needless to say, from a property perspective it’s a good time to open pop-up or permanent stores across the UK with plenty of choice and attractive rents. There’s also clear demand for this type of offer. When Colliers canvassed 3,000 shoppers earlier this year and asked which online brand they’d like to see open on the High Street, Amazon ranked No.1 by a substantial margin.

And, of course, Amazon testing the water in this way will resonate in the logistics property sector which continues to be a huge beneficiary from the distribution needs of the online giants. If this new approach to the customer interface takes off, the shed builders may find it a bit sobering that the next bunch of Amazon fulfilment centres might actually be a chain of shops.

This could be the beginning of something big in the developing relationship between online and physical retailing: the creation of a network of outlets featuring a wide range of brands with changing seasonal offers and customers whose loyalty is to the seller first and the brands second.

If the Amazon pop-ups go well and they turn into permanent multi-product shops they may need to think of a name for them. Perhaps something like ‘department stores’ would fit the bill?