Amazon to Shut All U.S. Pop-Up Stores as It Rethinks Physical Retail Strategy
wsj.com
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I'm pretty in awe that Amazon seems to have (at least) three bricks and mortar retail concepts on the go at the same time : Go, pop up stores and Whole Foods, and is only now deciding to cut one of them. Amazon's commitment to going with the data goes so so deep.
https://www.eater.com/2019/2/27/18243123/whole-foods-365-sto...
*At least my impression of Google and their structure/incentive system that pushes different groups to pursue the same thing and not succeed at any. Messaging is at the forefront in my mind.
Google is infamous for this sequence of events, time and time again:
1. We made this great new thing that's gonna change the way you verb! Hope you enjoy it!
2. (1-5 years of product stagnation)
3. Hey, thanks for the all the good times. We're closing the thing at the end of the year.
Amazon (for all their warts) is much more adept at keeping customer experience in their crosshairs.
Except when it comes to selling counterfeit merchandise. This is more than just a nitpick, they are cannibalizing their core business. What I don't know, and I assume they do know, is how bad is the problem. Is it impacting 1% of customers who ultimately leave their platform (which could easily be offset by other factors), or are we at the tip of the iceberg and they're going to continually lose marketshare with time?
It seems pretty clear Amazon is moving away from being a direct retailer of items and instead fulfilling orders for other stores. Moreover, they're leaving it in the hands of these storefronts to differentiate themselves by having them pay extra to separate their stock from other warehouse goods.
Lastly, it seems as if the end goal is for the retail store to become a platform for a new wave of direct to consumer manufacturers, which you see in the form of Anker, that trending Orolay jacket, etc.
My household buys on average 10-20 items from amazon each week for many years (combined personal, my business, my wife’s business) and have yet to receive a counterfeit item. Am I doing something different?
Occasionally I'll see a broken-English listing from a third-party seller advertising a $800 camera for $200, but when that happens I just...don't purchase the obvious counterfeit product.
I'm sure that much of the anecdata on HN unfairly paints Amazon in an poor light in regards to counterfeit goods. At the same time, I suspect that many, many people have bought counterfeit goods on Amazon and don't realize it.
Like I suspect the vast majority of people, I've ordered plenty of items from Amazon and also never run into a single counterfeit.
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As a tangent, you could also apply this same bias to driving the things like the division in social media. People surround themselves with people of the same affection and biases which, in turn, ends up being seen from their perspective as 'normal' which, in turn, drives radicalism since their distorted perspective creates a false reality.
I ordered the exact same listing maybe 4 or 5 times (at the top it would say 'You ordered this item on XX.XX.XXXX) and the sixth time I ordered it, what turned up wasn't Anker at all, and wasnt' even pretending to be. The pack was completely different and this was from a store listed as 'Anker'.
Of course, Amazon refunded and sent the correct item but it does happen.
"Under our seller programs, we may be unable to prevent sellers from collecting payments, fraudulently or otherwise, when buyers never receive the products they ordered or when the products received are materially different from the sellers’ descriptions. We also may be unable to prevent sellers in our stores or through other stores from selling unlawful, counterfeit, pirated, or stolen goods, selling goods in an unlawful or unethical manner, violating the proprietary rights of others, or otherwise violating our policies. Under our A2Z Guarantee, we reimburse buyers for payments up to certain limits in these situations, and as our third-party seller sales grow, the cost of this program will increase and could negatively affect our operating results. In addition, to the extent any of this occurs, it could harm our business or damage our reputation and we could face civil or criminal liability for unlawful activities by our sellers."
https://ir.aboutamazon.com/node/32656/html
Anecdotally, it's trivially easy to find obviously counterfeit products on Amazon. For example, the eighth result when I search for "yeezy" is this listing for an obviously fake pair of Adidas Yeezy Boost 350 v2 shoes. In many product categories, Amazon looks more like a seedy flea market than a multinational retailer. I have no idea what proportion of supposedly legitimate listings are for counterfeit products, but I have personally received counterfeit SD cards and USB chargers.
https://www.amazon.com/HEIMA-TRADE-Lightweight-Breathable-Ru...
https://www.flightclub.com/yeezy-boost-350-v2-white-cblack-r...
That listing for the "yeezys" you linked, though, is a great example of something I would never even consider... I don't have a specific heuristic for how I select products, but this listing violates a lot:
-Prime availability
-Multiple sellers with extensive trading history
-At least 10 ratings and preferably at least 100
-Rating above 4* and maybe 3.5* if there are limited options
-Description that is written in legible English and reflects the copy on the item as found in a store
-And only after multiple searches using different search terms to identify the "right" keywords that bring the most relevant products
This has and will be a problem on any platform, whether it's eBay or Alibaba or on Canal Street in NYC [1]. If it seems shady, it probably is.
My understanding on this matter is Amazon is going the way of giving the brand owners more control of the brand as one part of the solution. Ultimately they know their product(s) the best and are likely most aware of matters no heuristic is going to catch. Maybe it can be used to train an automated counterfeit identifier since this solution only scales for large brands that have resources already dedicated to the problem. You still get stuck with a McDowell's vs McDonald's problem of brand erosion from very similar knockoffs that tread the legal grey line.
My best naive wild guess (as a techie, not an MBA) is that a solution is Amazon private brands. Amazon could exercise control over the supply chain, could keep other sellers from piggybacking on a listing, could keep the reviews generally positive (in various ways, including aggressive investigation of suspected fake negative reviews), and could even have customer service treat private brands more favorably than many others. Plus preferential listing and smarter targeting.
Meanwhile, most other brands would still have to be on Amazon, but suffer the current awful environment of counterfeits, reuse of listings for different products, fake reviews on their and competitor's listings, etc.
https://blog.aboutamazon.com/company-news/amazon-project-zer...
I'd even surmise that it's not a particularly unique or interesting name.
What’s scary is the implicit quantity of counterfit products quoted here.
Disclaimer: Ex-Amazon employee.
Bought Gold Toes on Amazon. Squeezed my feet causing numbness. My wife reported the same with her much smaller feet. Manufacturing defects too. Nice, higher end semi-gloss cards and packaging, looked legit. Sold in packs of 6 pairs.
Bought Gold Toes at Macy's. Comfortable fit, no numbness. No manufacturing defects. Not letting my wife touch them. Sold in packs of 8 pairs. BTW $3 per-pair price actually less than Amazon even though not on sale at Macy's.
For google, you have one line of business than generates billions in revenue and another that generates a few million in profit, in the larger company, it's not likely to gain traction, where in another company it might be larger than the rest of the company.
To be fair, the iPhone has been an earth shattering success that created multiple brand new markets (e.g. App store, Apple Pay) and propelled Apple to become the first trillion dollar company in history and the most valuable brand in the world. It's difficult to convincingly make the case not to prioritize a product line like that above others.
You could describe both with the same shorthand cliches, but they're obviously very different.
I think the difference is how intentional they are. In this case, they want to do physical retail. They have certain ideas about what meaningful wins they can achieve in retail. What they're "testing" are, in a very broad sense, implimentation details and approaches. They are intent ona destination, but very expiremental about the route.
Google is/was either more "blue sky." They "expirement" more like a VC or incubator expirements. It's more about making likely betys than finding a way to do X. Anything that seems promising is worth a go. They have certain areas (ML, web/mobile platorms) that they invest particularly heavily in, similar to a VC's specific health-tech or ed-tech funds, but the destination is blue sky... "change the world and make billions with ML."
I would say amazon does it more like a startup, and Google is more like a startup investor.
BTW, sometimes one works and sometimes the other works. Google (mostly via android) had far more success in mobile devices/OSs, even though both attempted it.
I think you have to give the edge to amazon though. They managed to build a new business that was better than the old one. Google still makes all its money fom search+ads and supporting stuff. Even their big product successes (android, chrome, drive/docs, maps, etc.) are not money spinners. They arguably support the search+ads business, but nothing is in the same league as aws.
https://www.theguardian.com/us-news/2019/mar/06/whole-foods-...
https://www.wsj.com/articles/amazon-to-launch-new-grocery-st...
> “The pop-up stores were designed to ascertain demand, and Amazon can leverage that data for prototypes of other stores,” said Mr. Charles Lanier, director of real estate at Plaza Associates Inc., a private commercial-property landlord that operates Crabtree Valley Mall in Raleigh, N.C., which contains an Amazon pop-up.
> Amazon is innovating at a fast pace, he said, adding, “We’re big fans of the brand.”
I bet a raspberry pi case with a cape would be pretty cool looking.
I bought my parents an echo because they had them on sale at whole foods around christmas.
People are less excited to come and play with them because they're (for many people) easily affordable unlike Apple products where a try before you part with a lot of money is a bigger 'thing'.
> Amazon is expanding its bookstores as well as its so-called 4-star stores
So this is more of a doubling down rather than failure of brick-and-mortar retail for Amazon. I'm guessing they want to offer an Apple-like retail experience versus renting out tiny corners of existing stores like they do right now.
The purchase of Whole Foods seems to have benefited Amazon's grocery logistics, added pressure to competitors wanting to enter the online retail from brick-n-mortar sector, allows them to use the b-n-m to serve as warehouse and increases brand recognition
Try to get a loan from a bank or rent an apartment in France without a serious salary/long term employment contract. That's also the difference between US and these countries. Come back here when French people have easier access to cheap credit like in US. French banks don't like to take risks. What people say is irrelevant.
It is interesting to see them doing A-B testing at this level. I'm sure it happens regularly with other retailers, too, though.
Not sure why they'd then terminate employment and offer severance to people working for them in those stores. The key takeaway could be that these pop-up stores didn't result in tangible benefit to their bottom-line?
> The move was first reported by The Wall Street Journal.
Usually someone posts a link anyway so it would not make much a difference.
These are instead several small hassles, many separated in time, each requiring low level focus and effort. Maybe a customer doesn't have packing tape in his house, a cardboard box (since he threw it out) or label glue, so he has to start by to going get those first, after having initiated the return by going to a web site, signing in, finding the right page, and filling out a form.
Customers don't have to do any of that with an in store return. You walk up to the counter at a store you're already going to anyway that day with a receipt and unwanted product and say "This didn't work" "This didn't fit" "I didn't like the color" or whatever, couple minutes, and you're done. WalMart in particular often gives cash refunds, as in actual currency in hand, after a minute or two at most at the counter.
Often analysts will say "It's not a big hassle, the customer shouldn't have a problem with it."
That is true. But what if there is a competitor who offers a product return experience without requiring a series of small hassles? Maybe they instead have a very tiny hassle? Could that difference have an effect on consumer choices? Could consumers perhaps purchase even more products because they are confident that any return won't be met with a series of tiny trifling minor hassles?
Some theorists say yes.
But you're still right. No matter how easy Amazon makes it to ship a return, its still easier to return in person. The only exception is if you're not already going to that store, or don't have a car to go back to the store. I could see Amazon's hybrid in-person/online return options being the best of both worlds.
It will be interesting to see how to two bridge the gaps from opposite sides. Amazon moving from online to physical | Walmart moving from physical to online
If Amazon would pay for packaging too, the whole problem would be solved.
So I'm not hopeful, but I keep thinking someday some new CEO might just make it happen.
You originally had to call a phone number but now you say you’re on your way and it notifies the workers to come out and put your groceries in the trunk. My wife hates going inside Walmart’s so we’d use the smaller more expensive grocery stores, but with online pickup she stores her favorite items, adds them to a cart with a $30 minimum, and picks them up the next morning. It’s super convenient and we love it. I’d be hard pressed to see how Amazon could improve upon it, honestly.
I cannot use Fresh... I stopped using Amazon because with Pantry you’d get short-dated product and returns are a hassle. I think they have third party supply chain bullshit as well.
Walmart is a better option, their economics are better for “middle of the store” grocery goods and I don’t have the supply chain concern that comes with Amazon.
Walmart is fine for most staples but rarely do they have everything I’m looking for at acceptable quality. And, yes, I dislike going in the store.
He is being very proactive in building out things like online grocery, investing heavily in e-commerce (recent public results showing strong outcomes) and lots of targeted M&A related to digitally native brands to broaden the accessible customer segments, spending billions of dollars to remake / refresh the 5,000 stores, etc.
<disclaimer: currently work at a subsidiary of Walmart, immediately previously worked at Amazon>
And undoubtably further experimentation will ensue.
This is in the FAQ at https://news.ycombinator.com/newsfaq.html and there's more explanation here:
https://news.ycombinator.com/item?id=10178989
https://hn.algolia.com/?sort=byDate&dateRange=all&type=comme...