Amazon Vs Brick and Mortar

In the present day scenario Brick and Mortar stores should definitely leverage the data collected on their website to answer the questions like what genres of books to carry, which are the most frequently read books etc. The idea is to identify the trend in purchasing habits of customers and willingness to pay for different books. For instance a book store in a college town like West Lafayette is expected to carry more textbooks than novels. Using the data the book store can predict which and how many textbooks to carry in Fall and Spring respectively. In this way they’ll be able to reduce the inventory holding cost. The independent book stores who don’t have large web presence should focus on selling the experience and complementary goods like having an in-house café, pairing readers of similar reading habits, have regular discussion forums on politics, sports, music etc.

Amazon opening a physical store sounds such an anti-climax to the whole idea of Amazon transforming physical stores into online marketplace. The biggest reason I believe is to showcase/sell Echo, Prime Membership, Collect data of consumer behaviour and widen their customer database. In a normal tech store the footsteps increase only when there is an introduction of new technology as has been the case with Apple store and Samsung Store. On the contrary having a book store will continuously attract people keeping the store busy. Research shows when you have prime membership at Amazon the spending nearly doubles if not more.

In addition to cotemporary strategy, brick and mortar firms should also think of their way ahead in next decade or so. The rapid technology advancements can play a deciding role in the future of brick and mortar firms. Although people might argue it has been almost 10 years from the launch of devices like Kindle etc. yet the sales of physical books is hardly affected.  It’s quite interesting to compare the books industry to Music industry. Music industry had an era where songs were available only on cassettes but things have changed really fast, cassettes don’t exist anymore. The whole revenue model of the music industry has changed. Similarly with technologies like VR/AR increasingly becoming affordable we might very soon have better digital reading experience.