Last night I had the chance to get a sneak peak of Good Housekeeping magazine’s new pop-up store at the Mall of America, dubbed GH Lab, that it designed in partnership with Amazon.
The experience took my breath away.
I felt like the late, great Bill Paxton in Aliens. I wanted to shout “Game over, man!” from the top of Legoland for all the mall to hear.
Mark GH Lab’s opening date on your calendars, my friends—October 3, 2018. What likely is a random Wednesday for many may soon mark the singular event that could change the future landscape of retail forever. GH Lab may soon be known as the shot heard around the world.
GH Lab is great, not for what it is today, but for what it means Amazon now has the ability to do in the future. Here’s how it works:
It Is An App-Based Experience
Customers walk into the store and are greeted by a table that instructs them how to shop.
It takes just four easy steps. Customers simply download and open the Amazon app on their phones, tap the camera icon, toggle to the SmileCode function (i.e. Amazon’s fancy name for its own QR codes), and then scan the SmileCode next to any product they want to buy.
For most retailers, app-based experiences are non-starters because retailer app usage is pretty low. That is not a problem for Amazon though. The Amazon app is as ubiquitous as oxygen for many American consumers.
It Is A Showroom/Guide Shop Experience
The broad array of products at GH Lab are beautifully displayed in vignettes throughout the store. The store is a veritable cornucopia of at-home delights. There is a faux door with a Ring doorbell, a car seat display, a dining table with a place setting, a big screen TV with an Xbox, a kitchen countertop with appliances and wares, a section for kids where I almost bought a friendship bracelet making kit, and, my personal favorite, there’s even a bedroom vignette, replete with a tulo mattress and Marriott hotel signature sheets.
If I were in the furniture industry, and especially if I were Wayfair, I would be scared out of my gourd (see what I did there).
As with any showroom or guide shop retail model, customers do not take anything home with them from the shopping experience either. They simply scan a nice SmileCode on a tag next to each of the products they like, and then the scan ports them directly into the Amazon e-commerce app experience that so many Americans already know and love. They then decide how and when Amazon should fulfill the product. From a purchasing perspective the customer does not even see word one about Good Housekeeping following the scan.
Within GH Lab, shopping is completely divorced from buying—the hallmark characteristic of New Retail. There isn’t a single point-of-sale terminal in sight.
Why GH Lab Is Important
Amazon’s Platform Is An Easy-to-Use Retail Operating System
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.
Amazon’s Platform Changes The Business Model Dynamics Of Physical Retail
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.
Near-term, inventory, store labor and theft all go down because of the guide shop model. Longer-term, the platform gives even greater pie-in-the sky glimpses of retail operations that no longer have to consume themselves with the worry and pressures that come from supply chain operations and logistics either.
Physical stores instead can begin to act like Amazon affiliate links on websites. Amazon carries the product, the shop owner purchases some inventory for display, and voila! The shop owner takes an affiliate-like fee on every purchase—pretty much the same way magazines, like Good Housekeeping and others, generate revenue from Amazon product placements within their articles today.
Barriers to entry, namely capital requirements and retail-know-how, become far less formidable obstacles than they were in the past.
Amazon’s Platform Celebrates The Art Of Retail
Say what? Art and Amazon in the same sentence? Damn right.
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.
Touching and feeling products and the shear social joys of shopping are all that differentiate physical retail from digital retail anymore. The GH Lab plays to our imaginations and showcases products in ways that bring the joy and the art inherent within these just described psychological delineators to life within the physical realm.
They come to life via one simple word—vignettes. As you see in the video above, Amazon is facilitating vignette style merchandising with its platform. Who knew this day would come so fast?
Now with all the above said, GH Lab is by no means perfect. It will have its hiccoughs. Products will get moved around, SmileCode tags will get misaligned to the wrong products, and customers will likely get confused at times. But, it is a start, and over time new operational processes and technologies will be developed to handle the idiosyncrasies of the model.
It may not be game over yet, though I am inclined to believe, now more than ever, that Amazon is so far ahead of everyone else that the entire industry will soon be looking upon GH Lab as the first seeds of the next generation platform of 21st-century physical retailing. Amazon Go can’t hold a candle to the potential of what GH Lab could become.
Borrowing from another famous 1980s movie, Doc Brown summed it up best in Back to the Future, only he got one word quite wrong. Where Amazon’s going . . . they don’t need stores.