Many good points made here. What percent of sales/market does Amazon hope to gain from reducing shipping to one day from (already) loyal customers? Who will be more impacted -- brick or click stores? The cost (and waste) associated with next day shipping can only be reduced so much because it is largely outsourced. Can 3rd party sellers keep up?
I struggle to see the net value here long term in terms of net profit. If they are attacking physical stores, then they are still a day late vs BOPIS. If they are competing against online, then this is really about incrementally growing Prime membership. As with anything Amazon, it is all about scale.
BTW, most of these are the same arguments preceded Prime 2-day, but then again ... that was a gain of several days vs 24 hrs in logistics. Always exciting to see disruption in markets spawn new answers.
These comments have focused on the added value of improving returns, but we really don't have a good grasp of how much of their time will be spent on this process vs. greeting, collecting carts, cleaning spills, etc. My focus is more on what this says about the brand. Greeters are pretty rare. Hosts are not as uncommon. The greeters say something about the brand, especially when those folks are disabled or elderly. From a productivity perspective, this is an easy move. After all, greeters don't sell anything do they? But this move does change the view of the Walmart brand and the customer experience. The results of this single action may be hard to measure. For me, I wonder if this was not a spreadsheet decision or if it really is an indication of Walmart trying to change its image regarding service delivery.
While there were things to learn from pop-ups and their other physical store ventures, I wonder how much of this is simply about putting the Amazon brand in front of people... where they shop - to make Amazon (online) more integral with peoples daily shopping habits. I keep waiting to see small storefront Amazon "return centers" to appear. While they own 50 percent of the U.S. online space, they remain a small portion of total purchases.
We have seen this play out before. I fully expect Amazon to make a big splash in physical stores just as Sears transitioned from catalogs to stores decades ago. It does not mean the end of the world for other retailers by any stretch.
I am a bit surprised by some of the skeptical feedback here. This concept is nothing new and widely used by most major chains today. Publix is a great example of a well designed system (they detail it on their website). What is unique is the fact that they are not using pre-existing services from the likes of NuVal, Galdson, HowGood, healthyaisles, so maybe that could create some loyalty.
I have studied consumer behavior at the biological level and think they have keyed into some great design elements here. People read very little as they shop. They are very habitual and exhibit tunnel vision. Anything that can be done to facilitate faster product identification for shoppers (that don't read, etc.) should be a positive thing and increase basket size. Color is a required element of this approach.
If I had to be critical, I would say that they could further simplify the tags. Once a customer identifies the colors they want to hunt for, they have no use for the text. Images/icons are likely better options than text, especially in bilingual areas. The more label designations/colors they create, the more they dilute the value each brings -- 8 types seems reasonable especially since some will be department specific. Bravo, Raley's.
This as an interesting and valuable experiment, but I remain a skeptic on the long-term viability of such a store concept. I struggle to recall a successful implementation of this. As others have pointed out, it requires multiple trips (unless the customer is OK with home delivery) and there is a lost opportunity for impulse buying.
Also, so much of apparel shopping is about discovery. The size of the store would limit SKUs given that they would need significant inventory just to cover the sizes. Potentially, this could work better for male shoppers (think Men's Warehouse) who require less clothing diversity.
On the plus side, I think they will learn a great deal about customers' tolerance for delayed gratification and perceived value around service levels. There are also "stylistically challenged" people like me who will find value here -- note the growing trend for "wardrobe in a box" online. I suspect Nordstrom will take valuable insights back to their more traditional stores to see the value at scale.
Great comments here. For sure, Amazon has huge assets as most have pointed out: customer data, scale, and brand equity. Yet, it takes a lot more than data to be successful in brick and mortar, right? I am curious to see how many product segments this can translate to. And can Amazon foster the culture at their stores required to attract great employees who will create positive experiences (Apple/Starbucks)?
In the past, Amazon has had its own struggles attracting the needed talent — in their FC's, for example. At the least, I see some strong residual benefits associated with having a physical presence in communities if they can avoid the potential onslaught of reverse logistics. I very much look forward to seeing how this plays out.