BrainTrust Query: Will Amazon’s Showroom Become Amazon Showrooms?
For some time, there’s been speculation on whether Amazon will open its own stores. And, as the logic goes, in order to avoid all the physical store overhead — and to take full advantage of its distribution engine — opening showroom-only locations would be most likely. I thought it would be a good exercise to examine if this makes sense.
It’s hard to define Amazon. Are they a retailer, a shopping focused social network, a fulfillment company, a technical services company? To make them the power that they are, it’s apparently all four. Retailers can use the Amazon network to promote their own offerings, consumers can read and post product experiences, manufacturers can direct ship their products from fulfillment centers, and IT software companies can build their solutions on the Amazon services network. Everyone is happy. Well, except for brick and mortar retailers, of course.
For years, brick and mortar retailers have complained about online retailers not being required to collect sales taxes, and most of the ire has been directed Amazon’s way. Now it looks like that advantage will finally be lost. It also means Amazon will no longer be required to avoid creating a "nexus" (physical presence) in each state. More recently, the complaint has been that brick and mortar stores are becoming showrooms for the online retailers. With a (still speculative) same-day delivery service, Amazon would hope to satisfy the impatient consumer with near immediate gratification. This would only exacerbate the showrooming issue.
But if Amazon is truly able to create a better online shopping and fulfillment experience that drives the brick and mortar stores out of business, where would consumers go to see merchandise before they order it? Will Amazon eventually need to open its own showrooms? Is there a new retail business model evolving that consists of a super-fast fulfillment capability supported by consumer-facing showrooms?
I can see Amazon creating a local presence whose emphasis would be customer service and implementation. Consumers would shop for their new stove at the local showroom, but the delivery and installation would be coordinated from the fulfillment center. The local showroom would demonstrate a new entertainment center, but the installation would originate from the fulfillment center. Maybe Amazon would offer training and certification of local "Amazon Approved" contractors.
- Rumor Mill: The Amazon Store is Coming – Retailwire
- Rumor Mill: Amazon Exploring Same-Day Delivery – RetailWire
Discussion Questions: Do you think Amazon should begin now to establish its own showrooms? Do you see this as a unique retail business model and, if so, how do you see it spinning out?