Amazon.com, Inc. (Nasdaq: AMZN) and its massive e-commerce platform has forever changed the retail landscape. However, its latest experiment with partner Calvin Klein provides investors with a glimpse of where Amazon may be taking the retail business next.
This holiday shopping season, Amazon is teaming with Calvin Klein to open holiday-themed brick-and-mortar pop-up stores in New York City and Los Angeles. The pop-up stores may not move the needle much for Amazon investors this year in terms of revenue, but the technology Amazon is testing may serve as a blueprint for its long-term approach to retail.
Morgan Stanley analyst Brian Nowak has visited one of Amazon’s pop-up stores. He says there are several things for Amazon investors to like about the idea, and several kinks that need to be worked out.
Nowak says customer service at the store was incredibly friendly and helpful. In addition, he says the experimental dynamic pricing technology could revolutionize the brick-and-mortar shopping experience. Rather than placing price tags on the merchandise in the store, customers simply scan the barcode on the item with their phones to reveal its lowest current price on Amazon.com. Prices are constantly changing, and the store will always match the lowest online price.
Nowak says this is an excellent way for Amazon to differentiate its stores and help build customer loyalty.
“The traditional brick & mortar retail shopping experience needs to be reinvented, and this store is a good first step,” he says.
On the other hand, Nowak says Amazon missed an opportunity to show off the power of its Echo devices, which are integrated into the pop-up store shopping experience. Nowak says his interaction with Echo did not go smoothly, and he was unable to buy merchandise using Alexa. In addition, sales associates provided limited guidance for how to use the devices.
“While we understand the importance and potential for Amazon to utilize its brick-and-mortar square footage to showcase its Echo technology to drive user adoption, the Echo presence in this store felt a bit forced,” Nowak says.
Any tech investor knows that bugs are simply part of the equation. Amazon has never been…
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