Amazon, the king of online retail, took the industry by surprise when it launched a bookstore in Seattle. Many thought it may be a publicity stunt, but with plans for a chain of 400 stores selling books as well as devices such as kindle tablets, it looks like the giant is in bricks n’ mortar for the long haul.

So what can we learn from Amazon’s adoption of the traditional retailing model? We all recognize that there is something unique about browsing stores and touching and feeling products. Amazon isn’t the only one to see the power of the bricks n mortar shop. Apple recognized it when it opened its stores. Other companies have followed suit. Warby Parker, the trendy eyewear company, has opened 25 stores and subscription based beauty box provider Birchbox has gone down the same route. It plans to open more, following a strategy of pop-up shops to gauge customer demand in prospective US cities.

At first glance you may wonder why online and offline would mix into great shopping experience. But dig a little deeper and you will see that the long overdue match between online and offline is one that is meant to be.

What is the attraction?

We are all doing more and more online shopping. It is estimated that around 10% of retail purchases are made on line and the figure is growing. Online stores have the big advantage of no physical overheads, global reach, customer activity tracking and 24/7 opening hours regardless of time zones.

We’ve seen retailers move their operations either part or totally online. We’ve seen household names like Macy’s sales suffer as a result of being entrenched in bricks n’ mortar. So why this sudden shift in direction with the online players looking to the shopping mall to buoy up sales.

We’ve seen the big box shifters and shopping malls in the US lose their appeal. With everything online these days, the big advantage of big box retailers – stocking high and selling cheap – just doesn’t cut it anymore.

Instead what we have seen is smaller shops flourish. Consumers are suddenly seeking out a personal and unique shopping experience that they can’t get online. Amazon and Apple are all too aware that shoppers are chasing that high-touch, interactive experience they can only get in bricks n’ mortar shops.

Analytics is essential

Online is moving to physical it is easier to manage distribution and product returns. Physical stores can act as mini warehouses for home delivery, which can be logistically difficult online. These bricks n mortar stores can also act as a show room for merchandise. We may buy it from the store, or we may opt to check it out in the shop and buy it online when we get home.

Take the Amazon store, for example. It may look like a traditional store, but what it stocks has been carefully thought out using data harvested from the retail giant’s online experience.

What Amazon and the other online/offline pioneers realize is that online and offline are not two separate entities, they are one and the same. But what they do provide is an omni-channel experience that allows them to target the customer in cyberspace and in the store, hopefully generating increased sales.

Technology is the enabler

The road to success for the likes of Amazon in this omnichannel retail world is down to the successful application of retail analytics.

Analytics can help retailers find out what the competition is doing in real-time, enabling pricing strategies to be honed on the fly. It can also spot trends, enabling orders to be ramped up as required and target promotions accordingly.

According to market research firm Gartner, retailers such as Amazon have seen their total data volumes increase by around 1,000% year on year. With this level of analysis, you can incorporate highly personalized smart discounts linked to purchases. Multilingual features will become increasingly important as they can glean merchandising intelligence regardless of location, finding out what sells best where.

With all the data points that Amazon has accumulated, thanks to powerful analytics, the giant is more than confident it can pull in high sales offline as well as offline. Others will quickly follow.




Sanjeev Sularia, Chief Executive Officer and Co-Founder of Intelligence Node.