Amazon Rocks Retail Again with Announcement of Prime Wardrobe

Bricks & Mortars Must Step Up Their Game in New, Competitive Environment

Within one week this June, Amazon made two stunning moves: the $13.7 billion purchase of Whole Foods Market and the announcement of its new Prime Wardrobe service. The latter sent share prices of Nordstrom and Macy’s tumbling and prompted the media to deliver more dire pronouncements on the future of bricks and mortar retailers. “Another potential nail in the coffin for the department store sector,” wrote Wells Fargo managing director and senior retail specialty analyst Ike Boruchow. (Read more:

It’s interesting that Amazon’s recent moves involve expansion in both online and bricks and mortar. We are doing business in interesting times.

Retail Trend: Online Retail is Moving into the Physical Realm
Prime Wardrobe, currently in test mode, effectively erases two long-standing friction points in online apparel sales: no physical experience of the merchandise and the hassle of returning purchases that don’t fit. Warby Parker, Stitch Fix, LeTote and Nordstrom’s Trunk Club have been succeeding with the try-before-you-buy model, but Amazon with a million-piece inventory, many top labels and a base of 80 million Prime members in the U.S. alone, is in a whole other league. By now, you are doubtlessly aware of their program’s key features, but for a quick refresher, watch Amazon’s own story on YouTube:

Will Prime Wardrobe Make Amazon the Death Star?
By year’s end, Amazon is expected to surpass Macy’s as the biggest apparel seller in the U.S. and to command 8.2 percent of the market by 2018 and 16.2 by 2022. TJ Maxx will hold the number two spot, with Macy’s in third place. (Read more: Amazon’s numbers and growth projections are formidable, but there’s still a lot of turf where smart retailers can thrive.

Molly Nichols of Independent Retailer summed up this perspective: “Retail stores need to focus on the main reason customers come through their doors and how to enhance and personalize that experience by offering stellar customer service. Prime Wardrobe is not something to be afraid of, but something from which to learn.” (Read more:

Creating the Optimum Customer Experience
Since Amazon’s announcement, industry experts have unleashed a flood of advice about how traditional retailers can stay competitive. The tactics range from high-tech to traditional, from data mining to staff training. But the bottom line – whether high-tech or low – is bricks and mortars must deliver the kind of positive customer experience that draws shoppers in and brings them back again.

As regional leaders in retail real estate, we keep a sharp focus on what the experts are saying about the customer experience. Their advice falls into four categories that both chains and independents can scale and implement.

1. Understand Your Customer: Data is the best friend of today’s retailer. A good shopping experience is based on delivering what the customer wants. That can’t be done unless you know what that is.
2. Reach the Customer: Customers need to be made aware of their local retailers and what they are offering. Newspaper advertising once did this. Now it’s email and targeted social media which actually costs far less. Our recent Retail Sentiment Survey shows our retail tenants are embracing social media in a big way. That’s something we applaud.
3. Serve the Customer: There are lots of tempting bells and whistles here: navigation beacons, specialized apps, smart fitting rooms, mobile pay, same day delivery and in-store drive through for pick-ups. But even more critical is customer service. Human interaction is something Amazon can’t provide yet – even with its Echo Look camera to support Prime Wardrobe. Put smart, motivated sales staff on the floor and “arm” them with tablets or mobile phones for accessing information.
4. Entertain the Customer: Give people a reason to get out of the house with in-store events. Recently, National Lipstick Day giveaways brought big lines to shopping venues nationwide. Social media helped drive that traffic. Older stores may need an interior update to provide an inviting environment for events and promotions.

And keep an eye on Amazon’s bricks and mortar initiatives. What’s happening in their book stores and at Whole Foods? As mentioned earlier, we are doing business in interesting times.

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