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Amazon May Bring Physical Retail Stores to the Masses

Rumors abound this week that Amazon is going to trial a physical retail store in its home base of Seattle, WA. The online retail giant will reportedly stock the shelves with its successful Kindle lineup.  This, of course, includes the Kindle Fire tablet, which has emerged as a viable alternative to the Apple iPad. If the rumors are true, Amazon is likely responding to the success Apple has realized over the years with its dynamic retail stores, which allow potential customers to experience the latest Apple products before purchasing them.

Another notable offering in the new Amazon Store will be its own e-book titles, which other major book retailers have refused to offer.  Late last year, Amazon launched its own publishing unit, aptly named Amazon Publishing.  A physical location in which to demo Amazon Publishing titles on a Kindle e-reader, prior to purchase, could help accelerate Amazon e-book content, as well as Kindle device sales.  Moreover, improved Kindle sales could lead to an increase in demand for Amazon content in general.

Retailers like Target and Best Buy already offer Amazon Kindles, but Amazon is likely researching the advantages involved with having a brand name physical location. One such advantage is having sales representatives on hand who are experts in Amazon and Amazon only (although this analyst hopes Amazon refrains from calling its reps “Geniuses”). Educational in-store experiences that consumers trust often lead to purchases; although sometimes consumers still decide to hold off on the purchase to debate it for a while.  The good news for Amazon is that, in a case like this, it can rely on the fact that it offers the top-rated, most trusted online retailer experience, so this morning’s in-store Amazon customer could easily turn into tonight’s online Amazon buyer.

Regardless of the potential, Amazon is starting out small in terms of physical locations. It will start out in Seattle and will test the waters, while it continues to compete aggressively on price with traditional retailers that are burdened with the costs of maintaining a chain of physical locations.

  • http://www.robblewis.com robblewis

    I think this is a great move, though how they implement will be interesting. I’ve had many conversations where I’ve shared the concept of Amazon opening a bookstore  which is really a social gathering hole with a coffee shop, bakery, juice bar and other small delights with many places for people to sit and read individually as well as group rooms for book clubs or group reading. eBooks could be browsed on your Kindle and if you didn’t have your own Kindle Amazon would have rentals for your visit, like $1 to rent. The eBooks would be accessed from the cloud and the stores would have high speed access. Like the book, click to buy using 1-click and the eBook gets downloaded to ones Kindle, no cashier needed. Want to buy your own Kindle and not rent? Buy it there or order online through the store kiosk (yes, they could do it at home but capture the order right when the emotional connection is highest; they may change their mind one they leave and drive home. It could include physical magazines and books as well, it would be interesting to see the user behavior when they have to option of both. I could definitely see myself spending time in a place like this.

  • Gio

    COuld present competition to Starbuck and Barnes / Nobles business models.