Amazon Should Open More Physical Stores

1. Standard Heading

To:Jeff Bezos

From: Yimei (May) Wei

Subject:Amazon should open more physical stores  

1. Proposal

Amazon should open more physical stores in major U.S. cities.

As you are aware, In last 5 years,we reported a 25% average return rate for clothing,shoes and jewelry where there is a fit and trial element involved in the purchase.70% of the returns  are due to the customer not being able to touch the product before buying.When opening the package,customers find that the products are so different from what they imagined and decide to return. This return rate is a real challenge for our company because it costs us too much human and material resources in goods returning management and damages our reputation.

I would like to suggest our company open more physical stores selling products hard to sell online in the metropolises such as New York ,Washington D.C ,Boston and Los Angeles.Specifically, the proposal will focus on reducing returns and enhancing our reputation.The purpose is to garner support from Jeff Bezos for the proposal’s recommendations and implementation strategy, and the approval to move forward in executing the plan.

1.  Rationale    

1.Opening physical stores could create a more compelling shopping experience for our customers and reduce returns.

a.While e-commerce is very convenient ,customers still prefer to see and touch many products before they make decisions to buy.

b.Customers also like the immediacy of buying products such as clothing,shoes and jewelry in stores.

c.Customers could try out Amazon products and find something best suits them.If customers choose the products they really want ,they would not return the items.

2.Physical stores are essential to the reputation establishment of Amazon.

a.Having physical stores could help Amazon to become a major fashion retailer.

b.Decrease in amount of return orders would help us  build up our company image and the image is high quality of products and service.

3.Opening physical stores could also benefit our selling operation.

a. Physical stores could help drive purchases of our products because customers could  discover more Amazon products that they have not intended to buy in brick-and- mortar stores ;And products displays are important for driving sales on products that customers usually do not buy online such as TV and cell phones.

b.Physical stores would also serve as a mini-warehouse with same day delivery,increasing our delivery efficiency and saving  our logistics cost.

1. Research plan

1.Data collecting—Find out what products were returned most due to the difference between real products and pictures in customer ’s mind.

a.Research and analyze our return orders in the last five years. Collect the return orders for the reasons such as ‘description on website was not accurate/different from the real product’ or ‘no longer wanted’.Analyze those return orders and find out which categories of product are more likely to be returned for intangibility.