Amazon.com may have had the head start in e-retailing but traditional brick and mortar retailers have caught on and have invested heavily by expanding services online and creating an “omni-channel” experience for customers.
Now pure-play e-commerce players seem to be taking a page out of traditional retailers’ book and are introducing their own “omni-channel” strategy by opening brick and mortar locations. However, these locations are not your typical retail stores.
For example, Zappos tested the waters in time for the 2014 holiday season. Along with its partner, retail logistics startup, OrderWithMe, a 20,000 sq. ft. popup store was erected for the season at Las Vegas’ Western Hotel. Open 24/7 and consisting 16 rooms, the store offers a showroom of shoes and apparel. A kiosk is available with OrderWithMe’s ShopwithMe technology for customers to simply scan items to order.
Amazon is also dabbling with store-fronts. It’s partnership with Purdue University has resulted in two physical locations on the campus for pick-ups, returns, customer service and a handful of Amazon devices available for students to demo.
In addition to its partnership with Purdue, it’s rumored that Amazon is in talks with bankrupt Radio Shack to purchase some of its stores (Ok, forgive me… I’m going to take just a minute to pat myself on the back because this is something I suggested earlier in 2014). Anyway, a potentially good move for Amazon to not only to allow customers to test, feel and experience goods in-person but also a good move logistically.
For e-retailers such as Zappos and Amazon, these physical locations can serve as shipping and return hubs – they are closer to customer and thus can also allow for same day or perhaps even less than same day delivery. Not to mention, this reverse “omni-channel” approach may serve as a different type of “click and collect” location perhaps, but one that will also benefit delivery companies such as FedEx, UPS, USPS and regional carriers. In any case, these locations are altering the supply chains for e-retailers much like the omnichannel strategy that many brick and mortar retailers have adopted.
Expect more e-retailers to follow or to even partner up to open physical locations. However, caution is needed as many of these e-retailers have yet to turn a profit so this maybe the point in which we see a consolidation within the industry.
Interested in finding out more on e-commerce logistics? Be sure to check out Ti’s latest report, Global e-Commerce Logistics.