By Christian Sarkar
While many physical retailers are closing down underperforming physical stores, the rumors about Amazon’s upcoming expansion into physical stores are causing a stir in the retail industry. Thanks to General Growth Properties CEO Sandeep Mathrani, we hear that Amazon has a goal of opening 300 to 400 physical book stores. While that rumor was walked back quickly, it does not seem at all improbable.
Some observers are calling this a publicity stunt, simply a way for Amazon to get some attention.
Not true. Amazon has always had a stealth mindset, and does not like to court publicity for half-baked ideas. Instead, one can make the case that Amazon is about to upend the entire retail industry. What it has accomplished so far is nothing compared to what’s coming next. Here’s why: Amazon is using the intelligence gleaned from its digital operations to truly understand the customer – what they buy, how they buy and when they buy. This leads to a strategic principle that is a becoming a growing part of business strategy: use digital intelligence to drive business strategy.
Amazon’s using the online customer’s buying patterns to predict physical buying patterns. Couple this with the relentless use of analytics, automation, and yes, robots to optimize operations for efficiency, and you get a feeling for the retail “shock and awe” that is coming.
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