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[20 comments]

And Google Plans to Open a Store, Too (Maybe)

February 10, 2012

On the heels of the rumors that Amazon is planning to open its first store comes speculation that Google is looking to open its first standalone location in Dublin, Ireland.

According to Bloomberg News, Google has been operating a store-within-a-store at a Currys and PC World location in London and seen enough to try it on its own. The report said the small shop (1,323 square feet) would be located at the company's new European headquarters building. Google currently sells merchandise with its logo at its world headquarters in California as well as online at www.googlestore.com.

As to why Google is looking at opening a store, the talk is that, as with Amazon, it too is trying to keep up with Apple, especially in light of its plan to buy smartphone manufacturer Motorola Mobility Holdings. Google's Android is already the largest smartphone operating software.

Google, according to several reports, is moving into new product development on a number of fronts, perhaps giving it more reason to establish a retail base.

According to The Wall Street Journal, Google is "developing a home-entertainment system that streams music wirelessly throughout the home and would be marketed under the company's own brand."

Another report by 9to5Google, says the company is in the "late prototype stages" of developing eyeglasses with a computer interface. The so-called "Google Goggles" would use a smartphone's internet connection to communicate "directly with the Cloud over IP," perhaps superimposing directional signals and informational updates on the lenses.

Google was quick to temper expectations it would soon be entering the retail space. An unnamed company spokesperson told Mashable, "We already have an online store selling things like Google T-shirts and pens. We have the option of a small space doing the same in our Dublin office, but we've not made any decisions. It's simply a planning application."

FINANCIALS:     [NASDAQ:GOOG]

Discussion Questions:

Discussion Questions: Does it make sense for Google to get into retailing? How would you counsel Google if you were advising it on setting up a retail business?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Is it a good or bad idea for Google to open retail stores?

Comments:

For over 7 years, I have predicted that Amazon will (and should) open a physical store in Times Square and perhaps Piccadilly Circus. Finally, they appear to be considering this although it's in Seattle ... not exactly the world's crossroads! (But I guess they want to keep it close to home.)

I can more easily see why this will work for Amazon than for Google. T-shirts? Trinkets and trash? That wouldn't cut it.

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Joel Rubinson, President, Rubinson Partners, Inc.

We may expect more e-tailers to open physical stores within the next few months and the line between brick-and-mortar and click-and-mortar will continue to blur. Apple and Windows stores managed to orchestrate a unique, refreshing customer experience. Traditional retailers, beyond the consumer electronics category, should learn from them so that they can keep up with consumers' expectations and compete both online and offline.

Dr. Emmanuel Probst, Vice President, Retail, Empathica

Goes to show that e-commerce is indeed hurting bland and commoditized retail but is actually generating demand for "showrooms" where a manufacturer's wares can be exhibited in a controlled fashion. And thus may lie the future of retail: fewer retailers, more manufacturers selling theirs products directly to the consumers online and...in brick and mortar stores.

Fabien Tiburce, CEO, Compliantia, Retail Audit & Task Management Software

Why enter a world that you are already overwhelming? Perhaps Google has too much excessive cash flow that it is burning its gifted executives' brains, or is it a desire for the greatest world exposure ever?

If Google wants more human-touch exposure, then let it set up a retail business. But if Google wants to do something even more spectacular and ever-lastingly memorable, why not build the first bridge over the Atlantic Ocean? Perhaps Larry Page is dreaming about that now.

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Gene Hoffman, President/CEO, Corporate Strategies International

IF Google opens a retail store, it won't be to sell t-shirts and pens. It will be to retail the unique consumer electronic items on the drawing boards. If done with intention and patience, it could be amazing. They have the funding and the innovative chops to make this happen. Don't underestimate them....

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Mike Osorio, Senior VP Organizational Change Management, DFS Group

Just opening a store does not mean they are creating a chain. One real drawback of the internet is no human interface. Reading something on Facebook does communicate if the writer is smiling or frowning. Opening a store supports the sale of Google materials and all products utilizing their software. Further, it provides a lab to test consumer reaction and ability to use new products. I would put one on each continent.

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W. Frank Dell II, CMC, President, Dellmart & Company

It makes about as much sense as Walmart getting into the search business.

Bill Emerson, President, Emerson Advisors

This is an ideal way to find out if knowing your customers well provides a better retail experience. Google knows everything about its customers -- what they cook, the music they listen to, their interests -- so it will be interesting to see if that translates into sales. :)

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Cathy Hotka, Principal, Cathy Hotka & Associates

Non-traditional retailers, including e-commerce and technology solution providers, seem to be less focused on committed and expansive retail strategies with their own stores, but more interested in the idea of using these "test store" projects as a combination of branding and market research opportunities. In addition to the recent speculation on Amazon and Google, we've seen similar efforts from Microsoft and others which look like they are modeled to provide a direct consumer touchpoint for market research and for testing product and branding approaches. If Google's intent is indeed along these lines, then there could indeed be value to them in establishing and maintaining a limited physical presence.

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Matt Schmitt, President, Chief Strategy & Innovation Officer, Reflect

I believe this "retailing" fad is not related to selling products and is 100% related to PayPal opening up a concept store for their mobile payment offering last fall.

Google has already evangelized mobile payments being a potential trillion dollar industry and there is a highly competitive global race by several vendors to get mobile payments to the brick and mortar establishment. PayPal fired the first shot.

Google, Amazon, PayPal and others badly want customers and even merchants to accept their payment processing scheme, and that is what I believe is really the back story.

Ed Dunn, Founder, (Stealth Operation)

I think Google will use the retail store to learn a few things about how the consumer shops and have more of an opinion with how other retailers display their goods.

Advice: Make it a showcase of how well your products integrate and work well together. Demonstrate how to use various products ..."hey watch me stream music from my Adroid device to the speakers over there.... See that TV on the wall? It is streaming video from here as well. Oh, and all this content can be yours for $x per month...."

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Robert DiPietro, GVP Product Strategy & Business Development, Affinion Group

The wisdom of Elmer Fudd rings clearly, "Be vewy vewy careful!" It is interesting to see Google experimenting with a retail presence. I think an exciting opportunity for a Google at retail would be a 'showroom' vehicle to educate digitally empowered shoppers on all of the Google 'tools'-- past, present and future -- along with the Google Gadgets that are being developed to further the digital revolution. I would explore an improved version of Apple's Genius Bar leveraging Google's technologies. If it simply becomes a manufacturer's showroom I would balk.

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Adrian Weidmann, Principal, StoreStream Metrics, LLC

Sounds like a Google gift shop and nothing more. If this is a baby step into retail, it is a really small step.

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John Boccuzzi, Jr., Managing Partner, Boccuzzi, LLC

What is going on in the retail space is much larger than these questions about Amazon, and now Google. Let's drop back and consider that "retailing is the cutting edge of social evolution, always has been and always will be." The reason for this is first that people absolutely have to have "stuff" to survive, and that is only the tip of the need iceberg when you consider all the "stuff" they want, or might want. This latter bucket is the province of "aspirational marketing," that moves society forward. Aspirations are what convert wants into needs.

Retailing is the final mile of connecting people with the "stuff" they want and need. The fact is that for more than a century this essentially logistic model of retailing has progressed through two waves -- first moving frankly to self-service, A&P in the van with the world's first billion dollar business, and an obsessive focus on efficiency of operations AND the supply chain. The second wave came when Mr. Sam took the grossly inefficient Hi-Lo self-service business and reintroduced the vision of the operational and marketing geniuses of A&P, who had died in the '50s with totally inadequate succession plans.

Meanwhile, over the past decade plus, Amazon leveraged another logistics model -- delivery TO the people, and clicks on a computer as the interface between the retailer, Amazon, and the customers. But something very interesting happened right there. Willy, nilly, Amazon was forced to confront the purchase PROCESS as a stream of clicks -- digital data subject to advanced analytics. But this clickstream is essentially a second by second record of the mind of the shopper encountering and purchasing!

For the last decade plus there has been growing interest in the bricks-and-mortar clickstream, but most of the people looking at shoppers in the store are NOT looking at a second by second process, but are mostly stuck light years away (conceptually) from the actual mental PROCESS that occurs in a bricks purchase.

So now comes Google to the retail space. From a traditional bricks perspective, Google, being online, seems to be in the same space as Amazon, except that Google was behind the door when Amazon was becoming the preeminent SELLING organization in the world. Amazon knows more about the clickstream path that leads to BUY than anyone.

But Google knows more about collecting information - essentially what the clickstream is - than anyone in the world. Their information, however, is more eclectic and less purposeful, in effect, than most of the world is used to thinking. This is because, conceptually, Google can take a bucket of disorganized, apparently disconnected information, and through search, can recognize the minutest components in the bucket, and how each of those "bits" relate to all the other bits, and can serve that INFORMATION up in an organized interface. Thus Google is the preeminent INFORMATION business in the world.

Google has a potential overwhelming advantage over Amazon here. And that is the ability to link its vast holdings of OTHER information to the shoppers clickstream. Never mind privacy. The vast transparency of individual behavior of web surfers/transactors is grist for the Google mill. Now, can Google leverage that information process to introduce the fourth retail revolution in getting people together, not just with the INFORMATION they need and want, but the stuff they need and want? Don't count them out.

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Herb Sorensen, Ph.D., Scientific Advisor TNS Global Retail & Shopper, Shopper Scientist LLC

Bill, Walmart IS in the search business, just doing an incredibly poor job of it.

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Herb Sorensen, Ph.D., Scientific Advisor TNS Global Retail & Shopper, Shopper Scientist LLC

Google would seem to be a little thin, product line-wise, to get into the retail business in any significant way. While Android seem to be really big, they can't sell just Android. They have to sell the devices also. Are they just going to sell Motorola? Are they going to sell everyone's android devices? Can a store be that big? I'm not saying that Google can't open a store, they can do virtually anything they want. What I am saying is there has to be a significant enough reason to justify its existence. Personally, I can find one here!

Ed Dennis, president, Dennis Enterprises

Go for it. Your signage on a white background would look nice. But which category?

Ashish Sanyal, managing director, AMP RETAIL SERVICES PVT LTD

And now the circle is complete. One of the major implications of the internet boom has been the creation of e-commerce on the whole and specifically online retail. Back in the '90s, all the internet kids were predicting that the physical store was a dinosaur whose extinction was only a matter of time. Now between Google and Amazon we see what may be the two most iconic web companies on the planet opening up brick and mortar locations. Who would'a thunk it?

Tim Callan, CMO, SLI Systems

No, no, no. Just like Amazon, Google needs to stick to its core strengths. Google only needs to look at the poor performances of Microsoft as it tried to get too involved in areas which detracted from its core competencies to learn this lesson. "Stick to what you know" is the advice which Google should use as its mandate. There are many other things which Google can improve upon (and spend its hard-earned resources) instead of opening a bricks and mortar, deficit creating store.

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Kai Clarke, President, Kowa Optimed, Inc.

Why would Google want to open a store? They could build a virtual reality theme park with all sorts of activities to keep the visitor amuzed and amazed. Think DisneyQuest but without the Buzz Lightyear.

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Jerry Gelsomino, Principal, FutureBest

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