Store Check: New Amazon Style Store

Our Amazon Style store check provides a holistic perspective on the store format, explains the innovative shopping process, and discusses the impact on store operations and profitability.

Amazon has been known for its customer centricity from day one. Amazon is also widely known for its A/B testing approach to building businesses. Take those two key ingredients and voilà, enter the brand new Amazon Style store. It’s been open for a few weeks, so it’s high time we take a closer look at what is arguably one of the freshest takes on fashion retail. Join me in forcing this ultra high-tech store through a rather traditional store check approach to see what we can make of it!

Location, Location, Location

The new Amazon Style store opened in Glendale, California – in The Americana shopping and event mall, to be precise. A place for the whole family and for all ages, where you can shop, dine, do business, and attend events all year long. According to the mall’s owner Caruso, it’s one of the 15 most productive and highest grossing retail centres in the world. From a footfall perspective, this should be a strong location.

The 28.000 sqft (2.600 sqm) Amazon Style space is one of 80+ stores in the mall and was previously occupied by young fashion brand Forever21. It is located very visibly by the western mall entrance from Central Avenue. In immediate vicinity, you’ll find fashion retailer H&M, electronics giant Apple, and the Cheesecake Factory. Overall, the location quality within the mall can be characterised as good.

amazon style store check location

(Source: The Americana, Berendes Unternehmensberatung)

Mainstream Brands for a Mainstream Clientele

The mall caters to a very broad shopping clientele. Brands and retailers like Nordstrom, Bloomingdales, Urban Outfitters or Nike form the solid foundation and reach up to more premium brands like Lululemon, Tori Burch or & Other Stories. Luxury brands are not a focus in this mall. From teens, families, to silver surfers, all types of shoppers can be expected at The Americana. They tend to favour basic to conventional styles, i.e. you won’t encounter many trendy fashionistas or brand-driven luxury aficionados.

Amazon Style store audience

Shoppers of all ages visit the Amazon Style Store (Source: Agasi Tech)

Store Layout, Zoning, Merchandising and the Role of Influencers

With 28k sqft, the Amazon Style store is a large fashion store. The space is split into two levels, and additionally split into a so-called front of store and back of store. Both areas have their own manager in charge of the respective teams. This is an interesting split between the selling and fulfilment functions, and we will return to this point when we examine store operations.

(Source: Berendes Unternehmensberatung, Hopescope on Youtube)

On the lower floor, you’ll find all the goods, a see-through wall into the back of the store, and 17 of the store’s 40 changing rooms, which are central to the Amazon Style store experience.

Women’s apparel take up around 60% of the lower floor selling space, men’s and accessories the remaining 40%. Product display and zoning are done by a mix of dimensions, much like the filter options you would find on a website:

  1. Product categories (e.g. denim, dresses, tech basics, accessories (bags, belts, hats)
  2. Styles (e.g. trend, classic, active)
  3. Occasions & recommendations (e.g. top picks, great night out, the summer edit)
  4. Brands (e.g. Lacoste, Levi’s, Champion, Theory, Rebecca Taylor)
  5. Price, sales and deals (e.g. denim under $50)

The mix of dimensions by which to browse products is inspiring, there always seems to be a surprise lurking just around the corner.

amazon style store check product dimensions

(Source: Berendes Unternehmensberatung)

Speaking of inspiration, Amazon is clearly betting on influencers. In what has proven a winner move for online pure-play retailers like AboutYou or Zalando, influencer outfits are visibly displayed across the store.

amazon style store influencer outfits

(Source: Amazon on Youtube)

In addition, small impulse-shopping items like skincare products, water bottles, scented candles or small consumer electronics are spread across the store – much like you would see at IKEA. This is further driven home by the means of a large impulse-purchase shelf placed near the cashier area to tempt waiting customers.

amazon style store impulse purchases

(Source: Berendes Unternehmensberatung)

I would describe the overall look & feel of the store as clean, bright, and modern. Signage is clearly visible and makes it easy to navigate the store and find the desired products. The atmosphere feels very approachable and neither cheap, nor overly expensive. Mannequins are generously used across the store to inspire consumers who may not otherwise feel confident enough to put together an outfit. However, the area with all the influencer outfits on display feels visually very imposing.

The Shopping Process: A Great Blend of Online and Offline

With the retail basics of our Amazon Style store check ticked off, let’s focus on the process and technology behind the shopping experience.

The use of QR codes is fundamental to this setup. Every product and every outfit carry a QR code. Each product is only shown once and for display purposes only. To try on a specific garment, you add it to your digital shopping basket by scanning the QR code, and have it delivered to your changing room.

Amazon Style QR Codes

(Source: Agasi Tech on Youtube)

As a side note for those complaining about Amazon’s inability to present brands well in their online store: due to this ‘one item for display only’ policy, the store feels a little more like a luxury boutique, with an overall lower product density than in your average mass-market retail store where product pressure sells.

Shopping the Amazon Style Store – Step by Step

  1. Log into the Amazon Shopping app by scanning a QR code at the entrance

    (Source: Hopescope on Youtube)

  2. Key information collected by the Amazon Style app before you start shopping: Register when entering the store so your details and preferences are already pre-loaded. Indicate what sizes you typically wear in tops, bottoms, dresses and shoes. Indicate your body shape (supported by pictograms). Indicate product categories or occasions you are shopping for (athleisure, casual, business casual, night out etc.). And indicate your preferences on a couple of item prompts to help identify your fashion style.
    Amazon Style App

    (Source: Mashable)

    This data helps Amazon recommend items that best suit your style preferences and body shape. The information you provide here is also a key element for Amazon to drive store productivity by increasing the average ticket value per customer.

  3. Scan your items and have them delivered to your changing room in the desired size and colour, or have them delivered to the pick-up area. You will be informed about your waiting time for a changing room. And you always have the option to either go to the changing room as soon as it’s ready, or continue browsing and wait for the next style store changing room
  4. In the changing room you can adjust, buy, or leave. After opening the room in the app, you enter a private first-class cabin, big enough to move around in comfortably. Once inside, you can access the items you selected, and additionally try on items added by the back-of-store team based on algorithmic suggestions. If you want to add new items, switch sizes or colours, you can do so on a large touchscreen inside the changing room. Items will then be delivered to a locker accessible from two sides (based on early experiences within two minutes max).

    amazon style changing room process

    (Source: Amazon, Agasi Tech, Hopescope, all on on Youtube

  5. After you’ve tried everything on at your leisure, you simply take the items you want to purchase to the cashier.

The process is surprisingly smooth, and from an emotional perspective definitively provides wow-factor, particularly in the way the changing room becomes the centre of the process. You feel like you are at home with anything you desire only a two-minute delivery away. Isn’t that precisely what our generation of see-now, buy-now desires? Convenience and instant gratification?

One question remains, however: Why does the Amazon Style store need a cashier area at all? Why can’t customers, in true Amazon Go fashion, do everything in the app and thus conclude their shopping experience faster and more conveniently?

From a consumer perspective, Amazon has done a lot right with the Amazon Style store. Despite some criticism about long waiting times, which are to be expected during the opening period with higher than usual store traffic, I see no major flaws in the concept.

Can Algorithms Save Store Profitability?

But what about Amazon’s perspective? Is this just a test store for something else altogether, or is it the blueprint for a profitable format soon to be rolled out more broadly? While we have yet to see any corporate announcement on expansion plans, let’s dive into the commercial and operational aspects of the store.

My retail gut feeling tells me that this store format will be a tough one to turn profitable. It’s a large store in a prime location, i.e. rent won’t be low. It takes a large back-of-store logistics area to supply the changing rooms, and the 40 changing rooms take up more than one level of the store. Amazon is thus placing a big bet on its algorithm to make the changing rooms the most productive selling area. And while a large proportion of customer service and cross-selling efforts are shouldered by the app, sales staff in the front-of-store area still help customers find what they need and offer support with the shopping process. It will be interesting to see how this evolves over time.

On the plus side, there are efficiencies that you would not typically find in a regular fashion store, particularly when it comes to merchandising or rearranging products on the sales floor. Since none of the products are for take-away, it takes a lot less effort to keep the store tidy and fresh. Also, by delegating the whole product search and delivery process to the back-of-store fulfilment team, I am sure there are further efficiencies to be gained. Whether these advantages will be enough to compensate for the loss of almost half of the potential selling space to changing rooms, will be interesting to witness.

My prediction after this Amazon Style store check is that, in true Amazon A/B testing fashion, we will see variations of this format with different shares of space allocated to product display vs. changing rooms. I look forward to hearing your thoughts on this newest Amazon store format, particularly on how this impacts store operations and the store’s P&L.


About the Author:

Christoph Berendes is a consultant in strategy development and process optimisation for fashion brands and retailers. He has more than 15 years of experience as a consultant, line manager in the sportswear industry and in e-commerce marketplace distribution. Read more of his work here or get in touch with him via e-mail.

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