When Amazon started back in 1995, it was simply a website where you could buy books, but within just a month it was already shipping to many countries around the world. Amazon was one of the few survivors when the dot com bubble burst and since then it has done nothing but revolutionizes the market and continue to break all the models of expectations when it comes to profit and customer satisfaction. Amazon’s amazing management is only rivaled by their commitment to customer service and their impressive business model with a supply chain that is admirable, to say the least.
Since 2015, the company started experimenting with physical retail by opening a few stores where customers can purchase books, gadgets and even groceries. If you think about it, it is only obvious for the company to try to go this route since most people around the world still prefers physical shopping to the Internet experience. The virtual market has already been conquered by Amazon, it is to be expected that they are now trying to find ways to break into the brick and mortar stores, especially since people already trust the brand so much and any type of strategy they utilize will probably be met with unwavering support.
One of the reasons why Amazon may be trying to go this route is perhaps in order to be able to offer their customers a physical experience in which they can test out the gadgets they offer. The current stores Amazon have special events in which people can learn to use and try before buying. It is also important to consider how the immediacy of having the product on your hands ready to purchase may factor into the decision of converting to Kindle.
Having these physical locations also stimulate the growth of a community filled with Amazon users. People have the opportunity to interact with other human beings, something that can lead to more purchasing and also purchase items on impulse, something that happens less when you have to way a couple of days for shipping.
One of the most interesting alternatives Amazon has brought to the market are the stores they have located in different campus around the United States. Here customers can pick up the purchases they make online like dorm furnishings and other items that would otherwise incur higher costs if they had to pay shipping and handling charges. The concept is also being used in grocery stores that have your products ready for pick up without having to walk the aisles and once again, saving a considerable amount in shipping.
That last part regarding the grocery stores helped enhance everyone’s surprise last month when Amazon decided to purchase Whole Foods for $13.7 B. This symbolizes a true investment into the physical retail business, something that is sure making nervous companies like Wal-mart and Kroger. It may be soon for these retail giants to truly worry, but it is undeniable that if there is a company that may disrupt the balance in a market largely controlled by Wal-mart, that company is Amazon.
The one thing that Amazon has going for itself is the way the organization has been using data to enhance the way they do business. Big data will play a very important part in the immediate future on the way customers make purchases and they manner in which companies respond to their demands by analyzing tendencies and anticipating needs.
Amazon is already many steps ahead in this business of data implementation and the use of information to drive their business. When you purchase something from the company, your orders are stored, analyzed and studied in order to find what you may want next, suggesting it those items to you and in some cases, even pre-shipping them to a location near you so they can be close by when you eventually decide to buy. If this information and practices are applied to physical retail, we can be sure that things will change radically. Retail currently is starting to look at big data in this way, so Amazon joining the game is going to make those competitors truly start to worry about balancing the odds and matching Amazon’s strategies.
The use of big data is simply of the ways Amazon’s purchase of Whole Foods is going to revolutionize the physical retail world. Facial recognition technologies, cashless transactions and a way of implementing the Amazon model of item suggestions are other ways Amazon can change things up and this new acquisition is probably the opening of the flood gates that many analysts were expecting. At this point we are just going to have to wait and see what is going to happen, but know Amazon, the wait probably won’t be long.
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