The initiative of Amazon to diversify their services by creating Amazon Go and Amazon Elements was appropriate from the perspective of the company’s favorable position on the market and the available resources. The only possible risk on the way to the changes was the lack of experience in the sphere of traditional retailing, but it was compensated by their strong brand image and overall popularity. The past successes of the company as an online retailer also significantly contributed to a positive outcome of their activity through the provision of resources, such as extensive business networks, strategic warehouses, and numerous partnerships.
The decision of Amazon to enter the new market, which is offline retailing, was beneficial, but it is unlikely to gain such success as the online platform. It does not mean that it will not be profitable, but their online services will remain more attractive to the customers rather than traditional stores. The primary reason for it is the initial reputation of Amazon as a popular website selling goods. Hence, the company will not manage to become one of the biggest offline retail players because, in order to do this, they will have to reorientate their efforts to traditional retailing. However, such policies do not seem to be reasonable from the perspective of profitability.
The long-term success of Amazon Go is possible due to its difference from other traditional retailers. It is explained by the fact that shopping at this store implies a shorter trip and fewer purchases. Nevertheless, they are not unique in their intention to make the process more comfortable for customers with the use of these methods. It allows concluding on the potential sustainable growth of the business only in the case if it manages to compete with similar companies on the market. Moreover, it will be necessary to overcome the one-sided perception of Amazon as an online retailer created over the years of their work.
Amazon Go as the first “checkout-free” convenience store can maintain its competitive advantage with the help of specific methods. First, they should build more stores to ensure the continuous growth of their popularity among customers since their attractiveness can be decreased in the case of inaccessibility in some places. Second, Amazon should find a way to reduce the operating costs so that the prices could remain the same. As for the differentiation of Amazon Elements products from the goods of other suppliers, it should be done through the offer of values that distinguish their items from others.
The global development of Amazon’s offline retail marketing concept is possible but only in the distant future. At the moment, the situation of this initiative is unstable, and the company needs to make efforts to attract more customers and optimize their operation in order to make them cost-efficient in their home country. This process takes time and requires the allocation of additional resources. Hence, the key idea is to find a balance between Amazon’s online sales and the need to develop a new concept. Once this task is done, the creation of a strategy to promote offline retail marketing abroad will become reasonable.
Jeff Bezos was the right person to lead the company at the time of challenges that new offline retail ventures faced. On the one hand, he might seem to take actions that do not ensure the rapid progress of the initiative. On the other hand, his participation in the matter is the factor that guarantees the success of Amazon Go. It can be explained by the fact that the proper allocation of resources to the new projects can be made only by a person experienced in the current operations of the company. Otherwise, the physical stores of Amazon could fail in the case if problems with the online platform emerge. From this perspective, slow and sure development is better than rapid and risky moves.