Amazon goes omnichannel for the holidays (AMZN)

Daniel Keyes
Amazon Global Retail Revenue Q3 2017

BII


This story was delivered to BI Intelligence "E-Commerce Briefing" subscribers. To learn more and subscribe, please click here.

Over 100 Whole Foods locations now sell Amazon products such as the Echo, Fire TV, Kindle, and more, according to an announcement from the grocer.

Amazon started offering its products in a few Whole Foods stores right after its acquisition of the company closed, and has expanded the initiative to many locations since then.

It’s no coincidence that this milestone was announced just before the holiday season, as Amazon will be offering discounts on its products and is looking to leverage its new acquisition any way it can.

The e-commerce titan will also open Amazon-dedicated pop-up shops in select Whole Foods locations for the holiday season. Throughout next week, Amazon will be opening pop-up shops inside five Whole Foods stores that will allow customers to test out Amazon products and hear about Amazon services like Prime and Prime Video. The pop-up shops will be staffed, suggesting that they'll have employees who are knowledgeable about the available Amazon products and services, which differentiates the experience from the displays in other Whole Foods stores.

The “store within a store” concept seems to be part of Amazon’s strategy, as it recently executed something similar at Kohl’s locations. Amazon struck a partnership with Kohl’s that's given it a dedicated space in some stores for “The Amazon Smart Home Experience,” which is staffed by Amazon sales associates. The 1,000 square-foot concept may be a bit bigger and more smart home-centric than what will appear in Whole Foods, but Amazon clearly likes the idea of having an in-store presence without opening its own stores.

Amazon is using these spaces to expand its brick-and-mortar network to reach more consumers and bolster its omnichannel capabilities. Entering these stores gets Amazon more exposure among consumers, potentially helping it drive sales and increase its smart home presence in more households. Beyond sales, Amazon can use such store concepts to offer new and better omnichannel options. It's already started accepting returns at Kohl’s locations, and could consider doing the same at Whole Foods stores. Amazon could also try giving consumers the option of picking up online orders in-store, a desired alternative that this wider brick-and-mortar network enables.

Jonathan Camhi, research analyst for BI Intelligence, Business Insider's premium research service, has laid out the case for why retailers must transition to an omnichannel fulfillment model, and the challenges complicating that transition for most companies. This omnichannel fulfillment report also detail the benefits and difficulties involved with specific omnichannel fulfillment services like click-and-collect, ship-to-store, and ship-from-store, providing examples of retailers that have experienced success and struggles with these methods. Lastly, it walks through the steps retailers need to take to optimize omnichannel fulfillment for lower costs and faster delivery times. 

Here are some of the key takeaways from the report:

  • Brick-and-mortar retailers must cut delivery times and costs to meet online shoppers’ expectations of free and fast shipping.
  • Omnichannel fulfillment services can help retailers achieve that goal while also keeping their stores relevant. 
  • However, few retailers have mastered these services, which has led to increasing shipping costs eating into their profit margins.
  • In order to optimize costs and realize the full benefits of these omnichannel services, retailers must undertake costly and time-consuming transformations of their logistics, inventory, and store systems and operations.

 In full, the report:

  • Details the benefits of omnichannel services like click-and-collect and ship-from-store, including lowering delivery times and costs, and driving in-store traffic and sales.
  • Provides examples of the successes and struggles various retailers have experienced with omnichannel delivery.
  • Explains why retailers are having trouble managing costs with their omnichannel fulfillment efforts, which are eating into their profits.
  • Lays out what steps retailers need to take to optimize costs for their omnichannel operations by placing inventory where it best meets customer demand.

To get the full report, subscribe to BI Intelligence and gain immediate access to this report AND more than 250 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> Learn More Now

See Also:

By using Yahoo you agree that Yahoo and partners may use Cookies for personalisation and other purposes