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Omnichannel 2017: Amazon and Walmart Make Moves

Digital and physical worlds continue to mix and match

January 9, 2017 | Retail & Ecommerce

Early developments announced in the first week of 2017 signal that omnichannel continues to be the watchword for the retail industry.

Primary Device/Location Where US Internet Users Plan to Complete Their Holiday Shopping, Dec 2016 (% of respondents)

Last week, Amazon announced that it will open its newest brick-and-mortar bookstore in New York City, while Walmart subsidiary Jet.com said it purchased online footwear retailer ShoeBuy.

The Time Warner Center in Manhattan will be home to a new Amazon Books outlet, a companion to stores already operating in Seattle, Portland and San Diego. Others are planned for Illinois, New Jersey and Massachusetts. The 4,000 square foot location in New York will feature books and Amazon devices.

Meanwhile, the company is running another brick-and-mortar retail experiment, Amazon Go, a concept grocery store in Seattle that offers a no-checkout experience, set to open in early 2017.

While Amazon is expanding its physical presence, Walmart is strengthening its ecommerce business. Its Jet.com unit, acquired by Walmart in September 2016, purchased Shoebuy, an online footwear, clothing and accessories retailer.

According to Walmart, ShoeBuy will continue to operate as a standalone site, though "Jet will gain the experience of a well-established ecommerce player in the footwear industry." Walmart expects ShoeBuy's acquisition to "bring access to a large assortment of products, strong industry relationships, and rich content that will further enhance customer experience."

The moves are simply the latest signs of blurring lines in retail, and reflect consumer preference for choice. As consumers move essentially freely from physical shopping to virtual experiences, retailers are working to catch their attention in both areas.

When AYTM Market Research asked US internet users how they planned to make their holiday purchases in 2016, respondents were just as likely to say they would be purchasing online as they would be in-store. Research from Market Track conducted by Qualtrics also found that US internet users were close to evenly split in how they'd primarily make their holiday purchases. Approximately 52% of respondents said they would be making most of their purchases in-store, while 45% said they'd be doing so online.

Another reason why retailers are expanding their omnichannel strategies may be because omnichannel customers are simply more valuable than non-omnichannel customers. A study from Retail Systems Research found that in 2016 59% of US retailers said that omnichannel customers were more profitable.

—Alison McCarthy

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