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The store would reportedly be used as a small-scale warehouse, allowing customers to return, exchange and pick up online orders
The store would reportedly be used as a small-scale warehouse, allowing customers to return, exchange and pick up online orders

Amazon rumoured to trial brick-and-mortar store

News that Amazon may soon open a brick-and-mortar store is a seemingly clear sign that physical in-store experiences remain key to successful retailing.

The Wall Street Journal has reported that the online retail giant plans to open a physical store in New York City in time for the Christmas trading period.

It was said that the retail store would be used as a small-scale warehouse, allowing customers to return, exchange and pick up online orders while also holding limited inventory for same-day deliveries.

The space could also potentially be used to showcase Amazon-branded products, providing customers with the opportunity to physically handle and test items prior to purchase – a feature considered to be a major advantage for brick-and-mortar retailers selling jewellery.

Interestingly, while no official correlation has been made, Jeweller recently reported that Amazon was looking to expand its high-end jewellery and watch sector.

An Amazon spokesperson neither confirmed nor denied the rumour about opening a physical store, simply responding, “We have made no announcements about a location in Manhattan.”

However, should the rumoured outlet be successful, it was said that additional stores would likely open in other US cities.

A multi-channelled future for retail
Retail Doctor Group (RDG) founder and CEO Brian Walker told Jeweller the reported shift in Amazon’s business strategy was likely an effort to increase market share through a multi-channel offering – one that included both an online and brick-and-mortar store.

“It’s about having your brand across multiple distribution points at any given time and maximising the impact of doing that,” he explained, adding, “Amazon is an aggregator of online brands and it’s a magnificent company that’s done particularly well in that space, but I think it’s also seeing that unless it keeps acquiring companies, its organic growth in online in terms of net growth will start to slow.”

Walker confirmed that retailers looking to sell jewellery would be well advised to maintain a physical presence given consumers often hold emotional attachments to such products and value the ability to touch items before making a purchase.

“Jewellery has always been a purchase from the heart,” he said. “It has all the elements of human interaction.”

Earlier this year, online diamond and jewellery retailer Blue Nile also ventured into the physical realm, testing the waters of brick-and-mortar stores by installing several product display cases in US-based Nordstrom department stores.

Walker said that while research conducted by RDG showed 80 per cent of jewellery purchases were made in-store, online still had an important role to play in jewellery retail in terms of pre-purchase research.

“Do I think online pure-play [online-only] jewellery has a future? It only has a future in volume, low-price, low-margin commoditised product. It doesn’t have a future, in my view, in higher value, margin-enriched product that’s aspirational and emotional,” he said.

By the same token, Walker said brick-and-mortar retailers would also need to embrace multi-channel as the way forward: “It is the only real choice for physical store retailers to have an online presence as well.”

More reading
Amazon takes aim at jewellery industry
Blue Nile’s ups and downs
Internet-only retailers start to slow
Multi-channel shopping – more than just hype

Worth & Douglas

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