Amazon Stores: From Virtual to Real

Its heartening to see your predictions play out. I had blogged some time back on ‘why it makes sense for E-comm to have a physical brick and Mortar presence’. Amazon recently launched its store in the Big Apple The store is divided into sections like “Most Wished For” items, which represent those people are adding to their Amazon Wish Lists, as well as “Amazon Exclusives,” and “Frequently Bought Together,” which represents the Amazon algorithm come to life. It will also feature some locally popular products in its “Trending Around NYC” section.

There have been mixed responses on the store launch in online world . Some quoting this as a Blasphemy of the principles of Digital age, that to from a company who pioneered the move to digital, while others have looked upon it as a Brand building & experiential exercise. However I think that the Amazon store is much more than that. It will definitely not be the last store or the only geography for Amazon. The experience would move to multiple partnership model with real brands as highlighted in my post but more importantly this could also evolve to other Amazon services beyond E-commerce.

Amazon is increasingly becoming the de facto buzzword for startups and corporates alike when it comes to “Cloud enablement”. Thus Amazon is much beyond simple retail and exists in the B2B world and this is where the store could become much more to corporate segment. As the cloud deployments become “Primary” model of working rather than a “good to have backup” 3 years back, the complexity means some amount of customization/ support needed vs a DIY approach. The increased dependence on Amazon cloud offers an interesting market for Amazon to diverge into “Consulting and IT services” to enable cloud deployments. While this may seem like infringing on an unrelated IT development market, I really look at this as similar to the Kindle or Fire release to compliment the service consumption. The stores could act as consultancy pods for Technology scientist to work out of for providing integrated services to corporates to startups in designing and integrating various interfaces to create a true Cloud based IT environment. In doing so Amazon would be the first and perhaps the ONLY player to offer these kind of services to solve a complex technology problem.

Amazon already has many big SaaS deployments on their platform and an integrated physical presence/ consultancy based approach would not only help Amazon build stickiness with these SaaS players but also help in attracting more platforms on to its domain. Amazons brand should make attracting talent to its Technology workforce an easy task, making the rollout itself a rapid affair. Cross selling of books and other E-comm goods to the corporate execs who walk into the “Consultancy Pod” shall only be an added advantage. Thus the brick and mortar world of Amazon shall provide a much higher Return on Capital Employed (RoCE) by utilising it across segments rather than restricting it to a drab “Books Only” model.

So is Amazon game to leverage its physical presence not only for the Consumer but also to move up the value chain in B2B – time shall tell if this prediction too comes true !!!