Talking With: Euclid Analytics CEO Brent Franson on Amazon’s brick-and-mortar strategy

 
March 4, 2016 | by Judy Mottl

Top etailer Amazon ignited a flurry of media coverage last month in announcing it's looking to drive a brick-and-mortar strategy forward, building off its first physical bookstore in Seattle.

Pundits and industry watchers are all chiming in on whether it's a smart move, or a necessary move, and what the ripple effect may be for longtime brick-and-mortars already challenged by Amazon's successful retail strategy.

So Retail Customer Experience reached out to Euclid Analytics, which provides an omnichannel solution to 500 physical retailers, to talk to CEO Brent Franson on why the retail strategy must target the omnichannel consumer and why retailers have to provide the now-expected personalized and customized customer experience.

RCE: Given the supposed news of Amazon do you think expanding the physical store strategy would be a good strategy for them or not?

Franson: Amazon is ideally positioned to capitalize on an expanded offline presence. The company has built a phenomenal business on using data to its advantage. As the mobile consumer transcends online and offline channels, Amazon will leverage data and analytics to bring new levels of personalization into its stores while optimizing shipping operations. At the same time, Amazon is creating an omnichannel experience for its Echo, Kindle and Fire products. This formula has worked very well for Apple.
 

RCE: For other pure play ecommerce retailers, how critical is some sort of brick-and-mortar touch point — is having an omnichannel strategy the best strategy for retailers?

Franson: For niche or specialty online players, establishing an offline presence isn't necessary. For others, it does make sense. In fact, the dominant retailers of the future will be the ones that master both the online and offline worlds and create a seamless relationship between the two. You're already seeing several large ecommerce vendors establish a physical retail presence.  Companies such as Warby Parker, Gilt and Bonobos have all embraced physical stores as the lynchpin to their omnichannel strategy. In 2016, I expect more companies to follow Amazon's lead.
 

RCE: What are some hurdles or challenges a pure play ecommerce retailer will face in creating a physical storefront and are there any common missteps or don'ts they can avoid?

Franson: The biggest hurdle for the ecommerce retailers is transitioning from a virtual to a physical mindset. Managing the operational complexities of hundreds of stores and thousands of store associates is much different than managing a single instance of an ecommerce site. For example, changing the window display across entire chain of stores requires a much different approach than changing the homepage of an ecommerce site.

That said, as the online and offline worlds blend, data will become the common thread and linkage. Since the online world has perfected the use of data and analytics, expect ecommerce businesses to bring the same levels of disciple to their physical stores.  

The best advice I would give is to avoid the temptation of growing too rapidly. In the online world, it's easy to grow fast without burning through significant capital. In the physical world, growth is expensive — especially when opening new stores, maintaining in-store inventory and hiring staff.

 

RCE: Is it easier for a retailer to go from pure-play ecommerce to brick-and-mortar, or vice versa?

Franson: The online vendors have a distinct advantage when expanding into brick-and-mortar. As I mentioned, the online world has perfected the use of data and analytics to optimize their ecommerce businesses. These businesses know how to leverage data to make informed business decisions and create a culture of analytics. At the same time, ecommerce vendors aren't shackled by legacy infrastructure, data silos and inefficient business processes that have plagued some of the traditional retailers. So, without the legacy baggage and armed with a data-focused mindset, the pure play ecommerce vendors have the opportunity to leapfrog the traditional brick-and mortar retailers. 

 


Topics: Customer Experience, eCommerce, Mobile Retail, Omnichannel / Multichannel, Online Retailing, Retail - General, Supply Chain, Talking With, Technology

Companies: Amazon


Judy Mottl / Judy Mottl is an experienced editor, reporter and blogger who has worked for top media including AOL, InformationWeek and InternetNews. She’s written everything from breaking news to in-depth trends. She loves a great pitch so email here, follow on Twitter and connect on LinkedIn.
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