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New themed Amazon pop-up stores built on consumer data

After closing some 90 pop-up stores over the course of last year, Amazon appears ready to take another stab at the concept with plans to open a chain of themed Amazon pop-up stores with inventory in each store being regularly swapped out as part of rotating themes.

The company has established, or is in the process of establishing, five Amazon pop-up stores this year in or around major metropolitan areas including Las Vegas, Los Angeles, Denver, Houston and Chicago. The sixth location will be in Seattle, next door to Amazon’s corporate headquarters and an Amazon 4-star store, as the company continues its experiment to find the right mix of physical locations. According to Amazon’s website, the new retail stores will serve as “physical extensions of Amazon.com.”

One example of a theme in the Las Vegas store is a focus on cameras. Other themes that have been explored in Amazon pop-up stores include Barbie’s 50th anniversary, Marvel’s Avengers, an Audible reading room, the Food Network and a holiday toy list.

Amazon stores built on consumer data

Amazon’s themed physical stores add to the 26 Amazon Go locations in place or being renovated, 22 Amazon Books stores, 18 Amazon 4-star stores, two AmazonFresh Pickup stores and hundreds of Whole Foods stores. In the next month or two Amazon is set to debut a new chain of grocery stores in the Los Angeles area.

“Amazon is continually iterating with its physical locations, so it will be interesting to see where they end up landing with these different formats,” said Thomas O’Connor, a senior director with Gartner. “They can leverage all the data collected in these stores to more clearly see where there is an opportunity [to] further scale out.  Also, it is another opportunity to go after shoppers who don’t yet have Amazon Prime memberships.”

Another analyst agreed that data, again, will play an integral role in the potential success of the latest Amazon pop-up stores. Not only can Amazon collect more specific data on what customers prefer in certain locations, but the company can apply data it already has in hand about what customers might prefer in a certain zip codes with data collected as part of its 4-star store launches.

This fits the method of operation Jeff Bezos has of taking data and not being afraid to experiment. That’s what these themed pop-up stores say to me.
Guy CourtinFormer vice president of industry strategy, Infor

“This fits the method of operation [Amazon CEO Jeff] Bezos has of taking data and not being afraid to experiment; that’s what these themed pop-up stores says to me,” said Guy Courtin, a former vice president of industry strategy at Infor. “He’ll use the demographic data in those areas he wants to put in (a pop-up store), and if it does well then great, he’ll milk those revenues. If it doesn’t do well, he will pull the plug quickly. It’s a bit like the Halloween stores that pop up for Halloween season and then they’re gone,” he said.

The new pop-up stores remind Courtin of the kiosks companies such as AT&T and Verizon set up in malls to sign up random customers for their respective cellular services, only Amazon is looking to sign up customers for Prime memberships, products and services.

“Once they get you in the store, they are looking to sell you on [Amazon] Prime giving you access to their streaming video and music services, along with whatever themed products they have in a particular store,” Courtin said. “They [Amazon] are masters at locating and capturing new revenue streams.”

Amazon’s themed pop-ups give malls hope

With many mall management companies desperate for revenues from renters, Courtin and other analysts believe Amazon’s pop-up stores will be welcome additions — even if they only stay for a few months at a time and continually swap out inventories with every “theme” change.

“Mall management companies are losing their big anchor tenants like a Sears and others,” Courtin said. “If I’m a mall management company and can get Amazon in there for even two or three months, not only will Amazon benefit, but a dozen other stores right next to the Amazon stores will benefit. Also, it gives mall management companies the opportunity to look more modern to have a giant retailer in their location,” he said.

According to the company’s latest earnings report, physical stores account for about 6% of Amazon’s $70 billion in revenue.

Amazon officials declined to provide comment for this story.

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Microsoft offers few upgrades for Skype server in 2019

Microsoft added no significant end-user features to on-premises Skype for Business in 2019, closing out the year with a December update that mostly fixes bugs.

Microsoft’s lack of investment in Skype server underscores how the company views the product as a placeholder for businesses not yet ready to move to the cloud.

In recent updates, Microsoft extended location-based routing to Skype for Business mobile clients. The feature, now a standard component of modern business phone systems, helps companies reduce PSTN costs by keeping audio traffic in-network when possible.

Microsoft also this year began a phased replacement of the Skype server’s IT control panel, which is based on outdated technology. Another update gave IT admins new tools for automating user settings on a large scale.

Otherwise, the vendor’s July and December updates contained mostly bug fixes and security tweaks for the Skype server. In years past, those updates would have included significant features for the Skype product. But more recently, the vendor has focused its research and development efforts on cloud-based Microsoft Teams.

Consequentially, many organizations are not even bothering to purchase the latest iteration of Skype server, version 2019, released last October, said Tom Arbuthnot, principal solutions architect at Modality Systems, a Microsoft-focused systems integrator.

Instead, those customers are sticking with the previous iteration, version 2015. Microsoft has scheduled extended maintenance for the 2015 and 2019 versions of Skype to end simultaneously in 2025, giving businesses little incentive to make the costly switch.

“I don’t see load and loads of people upgrading to 2019. They will string out 2015 until they are ready to go to Teams,” Arbuthnot said. “[Microsoft is] disincentivizing you from going to 2019.”

The 2019 server introduced new ways to integrate the on-premises product with cloud services, such as cloud voicemail and Azure Active Directory. It also uses more recent security protocols. But it offers virtually no new end-user features compared to what was added to the 2015 version.

Microsoft’s decision to stop investing in its on-premises unified communications product stands in contrast to Cisco. The rival vendor has continued to enhance the features of the messaging app Cisco Jabber even while building out a cloud portfolio based on the Webex suite.

Microsoft appears more focused on winning subscribers to Office 365, a cloud-based suite of productivity apps that includes Teams. In particular, the company has taken aim at the collaboration app Slack, a competitor to Teams.

Microsoft announced last month that Teams had gained 20 million daily active users, more than Slack’s 13 million. But those figures still represent only a fraction of Microsoft’s base of customers, which includes 200 million commercial users of Office 365.

Microsoft has not revealed how many organizations are still using Skype, but it likely remains one of the most-installed UC apps in the market. More than 100 million people used Microsoft Lync as of 2015 when the product was rebranded to Skype for Business.

Meanwhile, Microsoft has announced that it will shutter Skype for Business Online, a cloud-based product within Office 365, on July 31, 2021.

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