Rumor Mill: The Amazon Store is Coming
Okay, I get it, but then again I don’t.
A report last weekend by Good EReader said that Amazon, similar to its Quidsi division, was tinkering with the idea of opening a small store in Seattle to show off items such as its various Kindle models and a widely anticipated Android smartphone line. The idea is that Amazon is taking a page from Apple and will open locations for people who need to touch and experience products in the real world before buying. Makes sense on a certain level.
What I don’t get is why Amazon would add a cost structure that could undercut one of its major advantages over other retailers — namely that avoiding stores has allowed the company to lower overhead and therefore offer better prices at pretty much every turn.
Just recently on RetailWire, a discussion centered on Target’s request to suppliers to help it come up with exclusive products and other means to battle "showrooming," whereby consumers use mobile apps to check prices and shop at Amazon and other online merchants.
Interestingly, a piece on the Wired website suggested an alternative approach; Amazon should open a store-within-a-store as a sort of hedge. If the test proved popular and added incremental volume, then Amazon could look at launching its own standalone locations.
The same Wired article also pointed to a previous rumor that Amazon would open a store, but rather than a boutique, a warehouse style facility.
- Amazon in the Process of Launching a Retail Store – Good EReader
- Target Looks to Battle Pricing Apps – RetailWire
- The Amazon Store? Maybe Try an In-Store Shop First – Wired
- Rumor: Amazon Retail Stores Coming & Predatory Pricing Channel Destruction – Launch
Discussion Questions: Do you think it makes sense for Amazon to open physical stores? If yes, what form do you think they should take?