Amazon

Check Out the New Amazon 4-star Stores -- And Get 4 Tips for Any Business

Amazon now has over 100 physical stores.
Check Out the New Amazon 4-star Stores -- And Get 4 Tips for Any Business
Image credit: Courtesy of Nicole Leinbach Reyhle
Guest Writer
Founder of Retail Minded & the Independent Retailer Conference
8 min read
Opinions expressed by Entrepreneur contributors are their own.

Amazon recently opened two of its three Amazon 4-star stores, making its collective brick-and-mortar experiences tally up at over 100 locations between Amazon Books, Amazon Pop-Up, Amazon Go and now Amazon 4-star. These investments from Amazon have customers, competitors and commerce-driven professionals alike speculating the future and the present of what Amazon is up to, but one thing is for certain ... physical retail is here to stay. Make no mistake, however, that Amazon's investment into this space is unlike anything we have seen in the past.

Related: Why This Online Clothing Company Started Sharing Its Profits With Brick-and-Mortar Stores

Merging its extensive consumer and inventory data generated from Amazon.com with futuristic ideas of what brick-and-mortar retail should look like, Amazon has opened its 4-star stores in the Soho neighborhood of New York City, a suburban town just outside of Denver, Colo., and most recently in Berkley, Calif. Presumably, these stores blend in with others if you were to simply stroll by and take a quick peak, but blending in with other retailers is exactly the opposite of what Amazon 4-star delivers.

In a recent interview I had with Cameron Janes, vice president of physical stores for Amazon, he explained that Amazon 4-star has been "built around customers and will continue to operate with consumers at the core of every decision we make." Expanding on this, Janes stressed that "with data leading decisions, humans have approved every single product in our stores."

With the human touch often dismissed in our technology-centric world, how is an online marketplace giant like Amazon welcoming the human touch in their physical storefront experiences? And what can other business leaders learn from this?

Below, consider four tips to take away from the newly introduced Amazon 4-star stores.

1. Customer insight should drive every decision businesses make.

Amazon 4-star stores have a curated mix of products that are only rated at four stars and above by customers on Amazon.com or are recognized through sales data as top selling or top trending items. Collectively, these details reflect what customers across the globe are buying and loving -- ultimately helping to narrow down expansive product searches for customers and deliver trusted consumer finds. This approach to identifying the inventory assortment available at Amazon 4-star stores is something any business leader can learn from, but too often businesses dismiss data generated from their customers. At Amazon 4-star, however, this data is proactively reviewed and then applied to the decisions made regarding immediate and future inventory assortments -- among other decisions, as well.

Related: What Small Retailers Can Learn From the Industry's Push Towards AI and Big Data

Genna Gold, senior manager of local business outreach for Yelp, explained to me that the value of consumer ratings "have changed the way consumers evaluate where to spend their time and money." Expanding on this, Gold shares that "reviews support customers in their purchasing decisions when they're already in buy mode, which makes them highly transactional."

According to a BrightLocal survey of over 1,000 U.S. consumers, 85 percent of respondents trust online reviews as much as personal recommendations. Amazon 4-star is smart -- to say the least -- to bring this review strategy into its physical environments. Supporting these 4-star or higher ratings are actual customer testimonials, which Amazon 4-star displays via printed review cards merchandised next to each respective product in combination with digital signage that is updated in real-time and highlights the price, customer ratings, product details and Amazon Prime price savings. The main takeaway here, however? Past customer purchases are what help push future customer sales.

2. Be where your customers are and know who they are.

When it came time for Amazon to identify where it would open its first three Amazon 4-star stores, it knew one thing mattered most.

"Whether it's in a mall like our Colorado location or is free-standing such as our Soho store is, we just wanted to be where our customers are," explained Janes.

The Colorado location marks Amazon's second physical store within Park Meadows, Colorado's largest mall. Joining an Amazon Pop-Up, the Amazon 4-star store benefits from already having established data on the local demographics of this particular area. And local -- believe it or not -- is an important factor in the Amazon 4-star strategy.

As Janes explained to me, "In each of our Amazon 4-star locations, customers will find products curated specifically to their regional market. In our Colorado location, for example, we feature 'Trending Around Denver' items that have been top-performing items sold in that area. We're able to change this frequently based on sales data to proactively accommodate local customers and ultimately better support each unique, local environment."

As it turns out, being where your customers are is only one piece to the retail puzzle for Amazon. Knowing who they are is just as important -- and as Amazon 4-star shows us by example, supporting customers with real-time inventory insight and product offerings in direct response to historic sales, local market trends and real-time data can help achieve this. Business leaders across all categories can use this same strategy in their own efforts to achieve stronger sales success.

Related: Alibaba's Futuristic Supermarket in China Is Light-Years Ahead of the U.S. -- and Shows Where Amazon Will Likely Take Whole Foods

3. Focus on your customers, not your competition.

When challenged with whether other merchants impacted Amazon's decision-making in opening physical stores, Janes confidently stated that "we don't focus a lot on the competition." Instead, Janes stressed multiple times that what Amazon does focus on is "our customers."

With a customer-centric strategy leading their decisions, Amazon recognizes that for most consumers, the stores will be the first physical interaction they have with Amazon. As a result, employees are trained to put customers first -- plain and simple.

"What matters to Amazon is customer obsession. We obsess over their experiences and want the employees within Amazon 4-star to do the same," Janes explained.

To help support its customers, Amazon 4-star designed its stores with an easy-to-navigate floor plan that highlights various categories of products that include consumer electronics, kitchen products, home decor, toys, books, games and more through simple merchandising strategies without distracting displays. Using both traditional signage and digital signage, customers shopping within an Amazon 4-star store can easily gain product knowledge, customer ratings and even suggested products to complement other items based on past customer purchases. This clutter free approach to merchandising has another benefit, as well, which is allowing employees to easily see throughout the store and more easily support customers as a result.

"Our merchandising is simple because it doesn't need to be complicated. We answer the most obvious questions that customers want to know through our signage and there's a clear line of vision throughout any point of our store. This helps our employees engage more easily with customers and view the entire store to identify who may need assistance at any given time," explained Janes.

Expanding on this, Janes shared that "it's a responsibility for our employees to know about our inventory so that they can make sure our customers end up with the right products based on what they need."

This customer-centric approach is not futurist like many of Amazon's other commerce strategies, but then again today's modern merchants are not necessarily known for customer service anymore. Amazon is re-inventing how customer service looks in brick-and-mortar environments -- as well as that despite competition, the customer should always remain top-of-mind.

4. Incorporate technology in combination with the human touch.

Amazon 4-star stores are highly curated and represent a direct reflection of their customers, but this doesn't happen by observation alone. Amazon depends greatly on technology and data to identify what are top selling items and must-have products for its stores. Additionally, Amazon 4-star is the perfect destination for consumers to engage with tech products such as Alexa to help customers identify if it's a purchase they want to make. Collectively, these experiences help Amazon 4-star deliver stronger customer engagement opportunities and sales alike. But, the human touch is not dismissed in these actions since every product being sold is in fact based on past human choices thanks to technology.

Related: Amazon Opens 4-Star Store in New York City

Through technology, Amazon has gained more clarity about who its customers are, what their customers want and how they can better support their customers in their end goals, which is to purchase products they both need and want. Conveniently enough, when putting the customer first, Amazon also reaches its goal, which is to continue to be a leader in the world of commerce -- not just online.

As you aim to reach your own goals in business, consider who is really leading your decisions. Is it exclusively technology? Or do you welcome the human touch, as well?

As Janes explains best, aim to create something that is "data driven yet human approved."

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