News & Views

Amazon / Tuft & Needle

by Contagious Team
This story originally appeared on Contagious I/O, our intelligence tool featuring the most creative and effective ideas in marketing from around the world

Mattress retailer gets into bed with Bezos

Mattress brand Tuft & Needle is partnering with Amazon to turbo-charge its in-store customer service.

The company launched in 2012 as an online-only retailer, but has since opened three showrooms in the US. For its fourth store – which will launch in Seattle this autumn – Tuft & Needle plans to incorporate a number of Amazon’s products and services.

For example, customers will be able to scroll through Amazon reviews on tablets, while taking advantage of the ability try out the mattresses in person. They’ll also be able to ask questions via strategically-placed Amazon Echo voice assistants, pre-programmed with exhaustive knowledge of key product features.

Once they’re ready to buy, the checkout process itself will be expedited thanks to the use of QR codes that customers can scan, enabling one-click purchasing through the Amazon app. Customers who are also members of Amazon Prime will receive same-day shipping if they buy at the Seattle store, with the goal of ultimately making two-hour shipping available via Prime Now.

Tuft & Needle plans to roll-out an additional 30 showrooms across the US by 2020.

Contagious Insight

If you can’t beat ‘em / The new retail reality is that brands keen to maximise their presence in the marketplace need to give careful consideration to how best to work with Amazon. Its sheer ubiquity as a platform is fundamentally altering the infrastructure of retail. Recode reports that 25% of Tuft & Needle’s sales already come via Amazon. With both companies relative newcomers to physical retail, each party clearly sees more to gain than to lose from the relationship. Daehee Park, Tuft & Needle’s co-founder describes Amazon as ‘the future of retail and e-commerce’. Rather than fight against their dominance, he says, ‘We focus on what we’re good at and plug in Amazon technology for the rest.’

Tried and Trusted / Optimising and enhancing the physical retail experience with digital technology has been a goal for several years, but the ambitions of seamlessness and improved customer experience have so far failed to match up to the gimmicky, patchily-deployed reality. While luxury fashion retail platform Farfetch has recently launched a suite of tools and services that offer partners a credible, holistic approach to blending online with offline shopping, the more everyday end of the retail spectrum has lacked compelling options.

Amazon, however, has long seen success with its reviews, with its app, with Prime, and even with its voice-powered Echo device: years of determined experimentation have created an ecosystem that straddles the intangible digital skills with a rock-solid logistics and fulfilment infrastructure. For smaller companies that want to outrun their immediate competitors, partnering with Amazon and exploiting this expertise looks way less risky than trying to compete, or reinvent the wheel by developing one’s own platform.

Everyone’s a winner? / Analyst Ben Thompson recently summarised Amazon’s goal as to take ‘a cut of all economic activity’. In total, Amazon accounted for 43% of all the revenue generated online in 2016, according to Slice Intelligence, and its gravitational pull on brands and retailers is well on the way to becoming irresistible. But if the benefits appear to outweigh the risks, it’s hard to justify holding out. According to Recode, 28% of those who visit Tuft & Needle’s stores make a purchase while they’re there, but when the company tested a same-day delivery service, the conversion increased by almost 50%. Implementing such a service as part of their regular offering is much easier to do with a partner like Amazon on board.