Amazon May Be Going Small With Retail Boutique Experiment
Amazon is planning to launch a retail store in Seattle in the coming months, according to reports published by Bloomberg and Good E-Reader. The endeavor is meant to serve as a pilot project for a possible chain of stores that would sell Amazon Exclusive books, as well as its Kindle Fire tablet, line of e-readers, and related accessories.
This will be no competitor to a big box store, though. The plan reportedly is to sell high-margin items in a boutique setting.
Amazon did not respond to our request to comment for this story.
A Growing Trend
Amazon is joining a small but growing trend of online sellers or service providers trying to establish synergies in the brick-and-mortar environment. Until now, the flow has been largely one-way, with stores such as Best Buy carving out complementary online sales operations.
However, Walmart recently opened two display stores in California shopping centers whose sole purpose is to lure customers to Walmart's e-commerce site. Shoppers can check out what is on display, and there are computers and tablets available if they want to place an order.
Paypal is also moving into the retail environment in a pilot project with Home Depot. Plans call for it to roll out its service in more than 2,000 Home Depot stores by next month.
The highest-profile and most successful example of this strategy, of course, is Apple.
Not a Guarantee of Success
Just because other stores have succeeded with this model doesn't necessarily mean Amazon will, Grant Cardone, host of National Geographic Channel's Turnaround King, told the E-Commerce Times.
"Corporate executives have a bad habit of chasing others' successes," he said. "This could be a case of 'Apple did it, so we must too.'"
On the other hand, there is some logic to the argument that not being able to touch the Kindle Fire or e-readers could be costing sales.
"Apple Stores allowed the company to get their products into the hands of PC owners in an aesthetic, fun environment and convert many consumers that may not have been sold had they never actually touched, played with and been given a demonstration of the product," Cardone pointed out.
More Showroom, Less Inventory
There is something to be said for the in-store experience coupled with the e-commerce price point, noted Steven Kramer, president of Hybris North America.
"Specifically, I think that for certain categories in retail -- big-ticket items, in particular -- the retail store of the future will be more showroom and less a pool of inventory," he told the E-Commerce Times.
"If you go to a Bass Pro Shop or a chain like Jordan's Furniture in Massachusetts, you'll see that these retailers make the store an experience that has entertainment value and gets people in the door," said Kramer. "The retail store of the future will be a place where manufacturers showcase their goods and provide access to expert sales people. The retailer's job will be to curate these brands, and provide the entertainment, infrastructure, and unbiased information that helps the consumer decide."
The Risks of a New Model
As with any new model, there are risks involved. However, those risks will likely be minimal for Amazon, Cardone said. "People have short memories, so if it doesn't work they just shut it down."
The bigger risk is when a retailer fails on a large scale -- such as with the empty BlackBerry and Sony stores. Both were visual failures, noted Cardone -- "not to mention the cost."