The last several weeks have certainly made for unexpected and unprecedented times for consumers and all players in the retail ecosystem and left a lot of businesses standing at a crossroads as they face the back half of 2020 and questions about what to do next.
And as Amazon’s Vice President Patrick Gauthier noted in a recent digital Fireside chat with Karen Webster, although the Amazon team “can count ourselves lucky” in many ways when it comes to weathering the storm the pandemic has kicked up across the entire economy, they also feel a responsibility to help the recovery process of the hard-hit retail ecosystem and merchants, not all of whom have weathered the economic storm nearly so smoothly.
“Being agile and customer-centric and solution-driven, we think we have an important role to play, to help at the Amazon level,” Gauthier said. He noted they’ve been busy with various initiatives, including the 175,000 person hiring push, COVID-19 research support and enabling easy charitable donations at checkout for consumers, which has raised millions of dollars worldwide. Amazon’s first round of priorities during the crisis, Gauthier explained, was largely around mitigation. Now, they are looking to the second tier of priorities, which he described as focusing on reacceleration or restarting the retail rush for merchants in a world that has shifted widely to digital.
Helping merchants compete on a new, digitally altered playing field, Gauthier told Webster, will be enabled by technology but not defined by it.
“Technology is kind of the means, not the end. For us, the part that we have to keep always in sight is the human component. It’s critical for both the merchant side of our business and the buyer side. And we know that when we lean into the human components, we actually see the velocity of commerce increasing. And when you talk about restarting things, this is all about increasing the velocity.”
Focusing On The Human Connection
Uncertain and unprecedented times have created incredible stress levels for consumers and merchants across the board, Gauthier noted, and both are looking for things that engender feelings of safety and security. In other words, trust has become a primarily valuable currency of late. The search for trustworthy connection, Gauthier told Webster, is hardly new to the retail ecosystem. It has long been the cornerstone of successful commerce but has gained a new priority as a host of firms are looking to bridge the digital divide and are looking for new ways to create connection points with customers.
“We think of trust as something that is absolutely fundamental and foundational for commerce. Without trust, there’s very little commerce. The data shows this unequivocally,” Gauthier said of research Amazon commissioned late last year that demonstrated that trust had both an emotional and a functional component for customers. Emotionally, it is about a feeling of safety a consumer has in an interaction; functionally, it is about whether the customer can quickly and easily leverage the payment methods they want and check out smoothly and seamlessly without issue.
Trust may have taken on a whole new relevance in the commerce world. However, the ways it can be developed and convened are unlikely to change much, Gauthier noted, because it is a thing brands build overtime by acting with integrity, transparency and being reliable in delivering on promises — and not “a consequence of technology.”
Any brand or merchant is capable of doing the things that engender trust among partners and consumers, Gauthier told Webster.
“The question then is, can it be done at a sufficient scale?”
Amazon, via services offerings like Amazon Pay or its marketplace, Gauthier noted, can bring merchants an opportunity to go after that scale. If a merchant in recent weeks has found it needs to go digital, integrating Amazon Pay, Gauthier noted, comes with access to an audience wired for eCommerce.
“And the research we’ve done with merchants has shown that they expect both from us, an acceleration of their digital innovation and access to the Amazon audience. Now, mind you, 75 percent of active Amazon Pay users are Prime customers, and they’re fluent in digital shopping. You don’t need to teach them anything. And to the extent that we help the merchant create an experience that is familiar for those digital shoppers, we’re going to help them accelerate their business in a world where digital is important.”
And digital is going to be important for much of the foreseeable future, Gauthier noted.
The View From The Future
What will the world look like at this time in 2021 — how will the pandemic recovery period have permanently changed the retail landscape? That was Webster’s concluding question for Gauthier as their conversation wound down — what will the next evolution of retail look like.
Gauthier noted his limited abilities in seeing the future but said that he believed the changes at first are going to be a bit more subtle than people are anticipating today. The physical store, he noted, will not ultimately be a casualty of COVID-19.
“I look at all the reports not just around the country but around the world of people genuinely wanting to leave their home and genuinely wanting to have human contacts again. And so this is why I do believe that the physical stores are not going away. They satisfy that fundamental need,” Gauthier said. But what we will see, he noted, is a shift in certain products that people did not think of buying online or in a digital environment. Fitness class a year ago would have looked like a physical experience through and through, but when you look at the success of Peloton to reinvent that experience for digital consumers, consumers may not be getting back to a physical gym any time soon.
The future of retail, he noted, will be about what it has always been about: a conversation between merchants and consumers. It is a conversation that it will be possible to easily carry on across more digital touchpoints as the world adapts to the increased digital innovation pushed forward by the pandemic. The brands that manage to carry it off the best will see the best results navigating the great economic restart and the new landscape that will emerge in its wake.
“I suspect we will see a deeper relationship with brands or a deeper dimension of loyalty and that will probably be more subtle and nuanced, but it will be an important change that occurs over the next 18 months.”