business news in context, analysis with attitude

by Kevin Coupe

Another week, another bricks-and-mortar innovation.

Go figure.

Amazon and Good Housekeeping have launched a three-month pop-up retail store at Minnesota’s Mall of America, called the GH Lab, a 2,800-square-foot store in which, it says, “every product in the store has been tested in the GH Institute’s state-of-the-art labs by top scientists, chemists, engineers and tech experts—presenting only the best, most innovative products across wellness, beauty, lifestyle, smart home, kitchen, toys and more.” The selection is highly edited - only one item in each category is on display.

Every item in the store, the companies say, is “shoppable through Amazon SmileCodes. To purchase or learn more, customers will simply open the Amazon App, tap the camera icon and select the SmileCode Scanner, aim the camera on the visual pattern of the SmileCode and center it in the frame. The product detail page associated with that SmileCode will appear on the screen and the customer can then add it to their Amazon cart and check out as they normally would.” Purchases are then delivered via Amazon; nobody walks out of the store with the products they have bought.

The companies note that the store is designed with different “rooms,” helping shoppers “visualize the products within their own homes.”

The store will be open through the end of the year.

In his Forbes analysis of the store, XXXXXXXXXXXX Chris Walton says he was totally “geeked out” by the store - and that’s a good thing. Among his comments:

• “All it takes to start up a retail operation like GH Lab is a dream. Amazon can license the tech and the SmileCode tags, and any mom-and-pop with an entrepreneurial itch can stand up a ‘powered by Amazon’ (my quotes) shop, likely with a few quick presses of a button, similar to how companies use Amazon to stand up web commerce today.”

• “We have seen this build-a-better mousetrap model from Amazon before. It is how Amazon licensed its website to other retailers back at the turn of the century … Pop-up retail is all the rage right now. But, for the most part, the pop-ups to date within the industry have been just old retail business models on shorter-term leases. Amazon's platform changes the game.”

• “What I love most about GH Labs is that Amazon's platform puts the art back into brick-and-mortar retail. When buying and shopping are no longer one and the same, it is a liberating feast for the senses. ‘Stores’ of inventory no longer need to be kept on hand for stock, and retailers can instead set floor pads however they desire in their efforts to capture the imaginations of their customers.”

I haven’t seen the store, but I am intrigued.

First of all, it is fascinating to see how many moves Amazon has made in bricks-and-mortar retailing just in the past few weeks. There are a bunch of additional Amazon Go stores that have been opened, there is the new Amazon 4 Star format, and now the GH Lab, which isn’t Amazon-branded but still clearly has a lot of Amazon DNA.

At the same time, each of these formats has been developed with some level of editing based on data. Amazon has so much information about customers and products that it can create a highly selective experience that is designed to reflect specific needs of local neighborhoods … it has the online data, and it has supplement it was continuing data that it gets from the stores.

This is just one vision of future retailing … not the only one, but a compelling vision to be sure. And it is ironic - though hardly unexpected - that a company that created an online retailing experience best described as “the everything store” is creating such targeted experiences.

Competitors need to think very hard about this. There are different ways to compete with this, but it seems to me that to try and do battle in this environment without data being a core weapon is like bringing a knife to a gunfight.

Fascinating. And the very definition of an Eye-Opener.
KC's View: