Khadeeja Safdar and Laura Stevens report in the Wall Street Journal:
Reminiscent of a novelty gift store or an airport gadget shop, the new Amazon 4-star store (is) selling his and hers mugs, candles, teapots, pet toys, “Star Wars” droids and vegetable peelers. Those are just some of the 2,000 rotating products, including books, toys, homewares and electronics, all rated four stars or above on the website. It looks like a refreshed version of a Brookstone store, the gadget purveyor that filed for bankruptcy. “This is less about Amazon getting into a new genre of retail, this is Amazon learning about physical retail.”
Amazon.com has seen the future of retail and it looks something like a refreshed version of a Brookstone store, the gadget purveyor that filed for bankruptcy last month.
Reminiscent of a novelty gift store or an airport gadget shop, the new Amazon 4-star store on Thursday was selling his and hers mugs, candles, teapots, pet toys, “Star Wars” droids and vegetable peelers. Those are just some of the nearly 2,000 rotating products, including books, toys, homewares and electronics, all rated four stars or above on the online giant’s website.
Alex Skidmore, a 34-year-old physician visiting from Pittsburgh, said he strolled into the location out of curiosity. The concept made sense to him since he often finds himself filtering products based on online reviews, though the setup resembles “one of those greeting card stores where there are lots of gifts,“ he said. ”But at least you know these are high-quality products that have been tested.”
Since its founding as an online bookstore in Jeff Bezos’s garage more than two decades ago, Amazon has disrupted traditional bricks-and-mortar retail. Consumers have transferred much of their shopping online, and Amazon has set high expectations for fast shipping and customer service.
Now Amazon has turned its attention to traditional bricks-and-mortar stores, developing a variety of new concepts in hopes of transforming the way consumers shop for groceries, books and devices.
The newest variation—which opened in New York City’s SoHo neighborhood Thursday—carries a rotating hodgepodge of top-rated items, each marked by a digital price tag that the company says will automatically adjust to match the prices listed online. Amazon chose the items because they are popular with shoppers on the company’s website.
The vast selection could work well to attract customers for the novelty of the store, according to retail industry consultants. But most stores establish a customer base through an established core group of products customers know they can rely on.
“You don’t go to Michaels to buy groceries,” said Elaine Kwon, founder of e-commerce management and software firm Kwontified and a former Amazon manager.
Cameron Janes, Amazon’s vice president of physical retail, said the store is set up for discovery. Customers of the company’s bookstores have been asking for a similar shopping experience with more selection, he said. And the ability to purchase and test Amazon devices will remain a staple of the consumer experience at 4-star, something he expects to be a continual draw.
Experimentation is a big piece of how Amazon innovates, Mr. Janes added. “What we’re trying to do here is invent something that we think is unique and different for customers and ultimately gives them more choice,” he said.
As for potential expansion, Amazon plans to “listen to how customers respond, listen to their feedback and from there we’ll figure out our plans going forward.”
Amazon 4-star’s mishmash of products are grouped using web metrics, such as top-selling items in New York City, books with more than 4.8 stars and items frequently bought together. The store also has dedicated sections for Amazon’s own electronic devices and products exclusively sold on the retailer’s website.
Unlike the web experience, the store offers a chance to test-drive electronics and discover products by wandering through the displays and shelves, said Mr. Janes. “You don’t have to do the filtering yourself because we’ve done it for you.”
Retail experts said that dynamic digital price tags haven’t made it into the mainstream yet because they are expensive and difficult to get right. Plus, consumers can be suspicious of the practice.
At 4-star, each digital price tag shows the product’s star rating, the number of reviews, the online list price and the price for the company’s membership program known as Prime. Nonmembers pay the list price. The digital price tags should automatically update with online price fluctuations, but the cash register should also ring up the current online price if it lags behind.
Still, on Thursday morning, the store price tag for an Anova cooking device was listed for $149 in the store, while an item listed online, with the same description and reviews, was $20 cheaper. When a store worker scanned the price tag, it rang up as $149.
“The manufacturer updated this product, and the version of the product we had in store should have been replaced with the newer version,“ an Amazon spokeswoman said. ”We are implementing new processes to avoid this issue in the future."
Despite the apparent glitch, consumers flocked to Thursday’s store opening. Sarah Ferrier, a 26-year-old producer visiting from Brisbane, Australia, said she wanted to see what all the buzz was about. It looks like a “normal tech or gift store” from the inside, she said, until she realized that the products were chosen based on reviews. “In that case, this is really cool," she said.
Retail experts say that Amazon’s bricks-and-mortar push is an important piece of the online retail giant’s broader strategy.
“Approximately 90% of all retail is still happening in the physical store,” said Rob Garf, vice president of strategy and insights at Salesforce Commerce Cloud. “This is less about Amazon getting into a new genre or category of retail, I think this is Amazon testing and learning about physical retail.”
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