Amazon’s Biggest Bite Yet: In-Store Shopper Data
In ancient Greek mythology, the Amazon were described as a tribe of man-slaying women warriors. Similarly, today’s Amazon is sometimes described as a slayer – of brick-and-mortar stores – blamed for the demise of multiple retailers. So, it’s interesting that the company has offered to pay $13.7 billion for Whole Foods Market and its brick-and-mortar footprint of more than 460 stores.
The deal came the same day Wal-Mart announced plans to beef up its online presence by acquiring online apparel company Bonobos for $310 million. There may be a lesson here for retailers about finding the right balance between online and offline, which likely has to do with both providing omnichannel personalized shopping experiences and optimizing distribution channels.
Speculation abounds about what Amazon is going to do with its shiny new toy. It’s easy to imagine the company integrating Whole Foods’ infrastructure into existing Amazon services, including Prime membership and AmazonFresh grocery delivery, to further revolutionize how and where consumers buy their groceries. In the process, the grocery checkout line could become a relic of the past, as could grocery stores, as we know them.
It’s also easy to imagine Amazon using its new footprint to expand shipping and distribution capabilities, making it easier for the company to claim a chunk of revenue from FedEx, UPS and other shippers via speedy drone deliveries. Even more future-is-now than a sky full of delivery drones is imagining an Internet of Things (IoT) home where you tell your Refrige-Alexa what you need and it shows up within hours.
But perhaps most important is how Amazon will use the influx of shopping data to further personalize the shopping experience. Amazon has always been a leader in gathering information about how consumers shop, but to date has had no way to determine how they shop in stores.
This is changing. Picture tracking in-store customer movements – she’s looking at organic coffee right now, he’s considering which type of imported cheese to buy – via Amazon’s phone app and in-store beacons that relay this data in real-time. Just like amazon.com tracks customer browsing and makes recommendations based on current and historical browsing and purchasing data, in-store shoppers could receive friendly push notifications – or even a visit from a friendly helper robot rolling up and down store aisles – telling them which brand of organic coffee or imported cheese other shoppers like them have purchased in the past.
Is either shopper leaving the store without making a purchase? If so, Amazon may choose to send an email later in the day offering a discount for purchasing the product online. Or perhaps Amazon will use the shoppers’ data — along with complex algorithms — to send a product recommendation for organic, gluten-free biscuits designed to enhance the flavors of the coffee or the cheese. Strategies such as these for integrating online and offline shopping have been touted for years, but Amazon will bring it to a “whole” new level.
Its integrated online and offline shopping experiences, together with new shipping/distribution options, could meld together in surprising ways. For instance, with the advent of driverless cars, consumers could summon Amazon’s driverless fresh produce food truck to their door via the click of a mouse, enabling them to inspect the fruits and vegetables for freshness before making their purchases.
Whatever the future holds, it’s clear that retailers will need to nail down personalization, including dynamic content, offers and recommendations. To do this, they need to identify their customers as they shop and collect the wealth of data that drives personalized marketing and communications. The ability to automate these processes, whether internally or through service providers, will only become more essential as we wade deeper into the era of Amazon, the slayer of the way we used to shop.
Bob Gaito is CEO of 4Cite Marketing, a multichannel marketing service provider, which he helped found in 2010. Prior to that, he founded I-Centrix, which was purchased by Haggin Marketing in 2007. Prior to I-Centrix and 4Cite, Bob spent eight years with Experian.
No June gloom for Costco
The nation's largest wholesale club operator reported strong sales for the month of June, both domestically and globally.
Costco Wholesale Corp. posted net sales of $12.17 billion for the five weeks ended July 2, 2017, up 5% from $11.33 billion during the year-ago period. Total same-store sales were up 6%.
In the U.S., same-store sales rose 6.5% in June. International same-store sales increased 6.2%. Canadian same-store sales rose 3.2%.
In a note, Gordon Haskett analyst Chuck Grom commented that Costco's traffic trends were very healthy during June, up 4.5% in the United States. Domestically, the chain's top performing regions were the Midwest, the Bay Area, Texas, and San Diego, the analyst said.
For the 44 weeks ended July 2, 2017, Costco reported net sales of $104.28 billion, an increase of 6% from $98.51 billion during the similar period last year. U.S. same-store sales increased 3.9%.
Costco currently operates 734 warehouses, including 511 in the United States and Puerto Rico, 95 in Canada, 37 in Mexico, 28 in the United Kingdom, 25 in Japan, 13 in Korea, 13 in Taiwan, eight in Australia, two in Spain, one in Iceland and one in France.
Another retailer is entering the hotel arena
Muji, the Tokyo-based global retailer, will open its largest store to date — underneath its very own hotel.
The company will open a hotel in in Tokyo's Ginza district in spring 2019. The hotel will be located in a new, 10-story building that will also house a 35,000-sq.-ft. Muji flagship. The store will occupy the basement floor and go up to part of the sixth floor, with the rest of the space above devoted to the hotel, according to the Nikkei Asian Review.
The Tokyo development won't be Muji's first hotel. The company will open a hotel in Beijing and Shenzhen (China) by the end of this year. According to reports, the Muji hotels will be outfitted with the retailer's furniture, accessories and toiletries, and designed in the brand's signature minimalist style.
Muji is by no means the only retailer to lend its name to a hospitality venture. Several high-end European brands, including Bulgari, operate hotels. And American retailers are also getting in on the act. Williams-Sonoma’s West Elm division is set to open boutique hotels in partnership with DDK, beginning in five cities next year. Hipster leather brand Shinola will open a hotel in its Detroit hometown in 2018, and Restoration Hardware plans to open a small hotel just steps away from its flagship in Manhattan’s Meatpacking District.
The Muji hotels are being developed by Tokyo-based rail and hospitality group Odakyu Electric Railway.