By Steve Ingram, Retail Director – KIT.
Amazon generated colossal fanfare in the UK this week with the opening of its first grocery store outside the US, offering what it calls ‘Just Walk Out Technology’. The Amazon Fresh store, located in Ealing, London, invites Amazon Prime customers to experience till-less grocery shopping by using a smartphone app. So, if the world’s largest and most successful online retailer is investing in the UK high street, surely this can only be a good sign for the physical store’s future?
Does it demonstrate to bricks and mortar stores that they must embrace the latest technologies to give the customer the experience they want? Or is opening the doors to a new, tech-heavy store using a leading-edge solution or merely a tourist destination?
Now is the winter of our discontent
The Amazon Fresh store opening comes when the UK high street is still coping with the impact of a year-long lockdown and increased numbers of customers shifting to online shopping. During the first half of 2020, 11,000+ shops disappeared from the UK high street. Although during the same period 5,000+ opened, demonstrating that businesses are still willing to invest in bricks and mortar, 2020 marked the worse net closures ever recorded, with a decline of 6,000, almost double from the same period the year before, according to research by the Local Data Company and PwC UK.
No one can deny that the outcome is an ever-changing high street, one that will regularly feature avenues of empty, boarded up shops creating in some cases a dystopian look to what once was a thriving town centre. But is there hope in how Amazon is using technology to create something new? It may not be a white knight charging to the rescue of the high street, but it will cause a ripple, and it could start a new trend, as the launch event stands out in these uncertain times.
Winning hearts and minds
Turning empty shops into new stylised fulfilment centres or collection points, supporting the continued growth in BOPIS (Buy Online, Pick-up in Store) and ROPIS (Reserve Online, Pick-up in Store), could be a positive way to recreate the high street. Still, one high street institution is planning to take this even further. Marks & Spencer announced this week that it is demolishing its flagship store, located at the Marble Arch end of Oxford Street and where it has been operating since 1930, to build a new 10-storey building. It will only have half the retail shopping space it currently offers, with the majority of floors due to be used for leisure and office space.
The British high street is evolving in front of our eyes, but perhaps Amazon is showing the retail sector the way forward. It would be easy to dismiss the new Amazon Fresh store as a clever marketing gimmick or a pop-up shop, but the online giant says it is committed to opening more branches in the future. As all retail leaders know, you underestimate Amazon at your peril, so those feeling that the ‘Fresh’ model is not scalable should perhaps hold those thoughts for a while.
Amazon is bridging the online and offline in its unique way, but this does not mean that this is the only way. Retailers that deliver 1:1 interaction with their customers, wherever they may physically be, are using Clienteling and Assisted Selling tools (such as KIT) to do this too. Understanding preferences, obtaining recommendations, and blending in-store and online shopping carts, are just some of the ways these tools help customers shop the brand and not the channel.
Maybe adopting the pop-up style approach to retail, which has proven very successful, will open up closed stores. Or perhaps we will also see versions of Amazon Fresh (or other innovative ideas) create new shopping destinations. Either way, as part of the high street’s evolution, it will breathe new life into localities while creating footfall, which can only be a good thing for surrounding businesses.