Bob Hetu, Research Director with the Gartner Retail Industry Services team, visits Amazon 4-star, the company’s new physical retail store which sell products rated 4-stars and above on Amazon.com.
Much has been written about the merchandising, or lack thereof, in Amazon’s 4-Star stores, but my visit to its Spring Street location in NYC was disappointing. Curiosity was clearly the driver for customers — and to be fair it’s interesting to see what locals are purchasing. However, that is where the interesting part ends.
The store does nothing to augment the online experience or extend the brand past its catalogue foundation.
- Leadership Webinar: Which-50’s 2019 Outlook and Business Transformation Drivers webinar is set for November 27. Register today!
Overall it’s just a confusing mix of stuff, resembling a Five Below in its merchandising strategy, albeit less congruent. At Five Below there is a logical backbone driving merchandising strategy: nothing more than $5. The 4-Star approach falls significantly short of providing a purpose for the store. The only section providing a logical structure was the Amazon technology area — something that is also the driver in its book store locations. Displays on the same shelf or table range dramatically, offering little congruity.
Despite spending a lot of time in the store I observed very little sales activity. The basics area — where cables and other such technology support are offered — likely generates sales, but also contained many “out of stock” slots. I suspect a very small percentage of customers make purchases, or even visit the store more than once. Amazon likely has a larger purpose for this store format — however, in my opinion, it’s unlikely that it’s to drive physical sales.
*This article is reprinted from the Gartner Blog Network with permission.