3 Ways Amazon Will Succeed With C-Stores—and 1 Big Reason It Won’t

By 
Abbey Lewis, Editor in Chief, CSProducts

Mitch Morrison, Vice President & Retail Executive Platform Director, Winsight

CHICAGO -- Two authors well-versed in all things Amazon have distinctly different ideas of how the retailer will fare in introducing a convenience-store concept.

For John Rossman, Amazon’s success in physical retail will stem from its uncanny ability to measure all relevant data and create cost-effective solutions that ultimately benefit the consumer.

Meanwhile, Richard L. Brandt acknowledges Amazon founder Jeff Bezos does bring two extraordinary gifts: technology and the customer.

“Jeff is brilliant with technology. He really created the first commercial enterprise on the internet, and he did that because he saw the internet was this incredibly growing phenomenon and thought, 'I can make a business out of that.’ He figured out how to do that, [and] he put customers first.”

But Brandt believes one overriding attribute will make c-stores a difficult road for Amazon …

  • Watch for a complete report on Amazon's entry into convenience stores in the February issue of  CSP  magazine.

Innovative solutions

The Amazon Way

In his book "The Amazon Way," Rossman shares that a 0.1-second delay in uploading a webpage can translate into a 1% drop in customer activity. As a result, Amazon has a standards contract that mandates page-load time be no more than 3 seconds. It’s a testament to Amazon’s attention to detail.

“Amazon has shown time and time again that by putting audacious goals on even the smallest tasks, it will continue to create innovative solutions,” Rossman told CSP Daily News. “I think Amazon will be patient and test many things in the physical store to see what works and what doesn’t work. I would expect the store to be mobile-enabled, commerce-centric packed even in a physical store.”

Urban markets

Amazon Go mobile app

A former Amazon executive, Rossman helped build Amazon Marketplace. He envisions a metropolitan retail footprint aimed at a more urban population and engineered by cutting-edge payment and fulfillment technologies—a store where customers not only buy what’s in front of them, but also can order items from AmazonFresh and Amazon.com via phone and in-store touchscreens and have items delivered to their homes or at an Amazon Locker or nearby Amazon store.

Tapping technology

Amazon

Rossman also expects Amazon to tap highly sophisticated store sensors to capture customer traffic and decision-making in order to continually optimize product assortment.

“It will have fewer store associates than traditional retail stores,” he said. “Customer satisfaction is more about getting what you want, when you want, at the best possible price. Amazon understands that better than anyone."

Another view

One Click: Jeff Bezos and the Rise of Amazon.com

Meanwhile, Brandt, author of "One Click: Jeff Bezos and the Rise of Amazon.com," said he didn’t anticipate Amazon’s foray into retail.

“I am surprised that Jeff Bezos is doing this,” Brand told CSP Daily News. “This is a change in direction. … That is a huge, huge shift for Amazon. And that’s going to be a real challenge. … Competing with c-stores is going to be exceptionally hard for Jeff Bezos. It’s such a different business.”

Brandt sees one distinct area that will challenge Bezos in developing a c-store strategy …

The people factor

Jeff Bezos, Amazon CEO

“People do not get along with him. When he was young, there was a Star Trek game that he and his fellow nerds liked to play and everyone wanted to be Mr. Spock, of course. But Jeff decided that he would be the ship’s computer. He’s great with technology, but just terrible with people," Brandt said. 

And that’s where Bezos could face his stiffest challenge in the convenience space. “To me, a convenience store, there’s not a lot you can do with technology to make it better,” Brandt said.

“What I’ve seen in retailing, the way to compete with Amazon is with customer service. That’s people stuff and that’s what will get people going to it. I don’t see any advantage to what Bezos has for a c-store, either with people walking in to buy stuff or delivering it.”

Then again, this is Jeff Bezos we are talking about. And as Brandt said, “he’s willing to take risks.”