More and more brick and mortar stores such as Walmart, Target, and others are investing in online technology allowing online purchases to be shipped to the purchaser's nearest store for local pick up. So how does an e-commerce giant like Amazon respond?
According to the website TimesOnline.com, Amazon, in response to the growing customer demand for site to store shipping from brick and mortar retailers, appears to be secretly searching for high profile properties to setup brick and mortar shops of their own. Techflash.com also sees Amazon's brick and mortar presence as a great way to show off the Amazon's kindle reader. Quoting a source from Maximumpc.com "When Amazon was just selling books and CDs that fitted easily through the letterbox it was fine to be a web-only business, but now it has branched out into everything from children's bikes to electricals it believes it could boost sales by having stores that offer a collection point for shoppers. It will probably be an Argos-sytle operation," said a source familiar with Amazon's proposals.
Depending on the markup of products for shipping to the respective stores and the cost of products being stocked in the store, I think this is a win win for consumers and Amazon. Not only does Amazon increase their business by expanding their business model but the customer gains a very respectable retailer in their community. Not to mention the creation of jobs within a jobs starved economy. With a net work of $59.1 Billion, Amazon definitely has the resources to compete in a retail market.
Josh,
ReplyDeleteThats pretty interesting that they are considering the switch to a brick and mortar shop. They must think we are on an economic upswing now. The one thing they have going for them is the brand name they've created. I just finished a report on Borders Books and one reason their online store is failing is their lack of a nationally recognized name for online book sales. If Amazon uses some good advertising to promote their move, I think it could work. It would hurt our local friend Borders though, so lets hope it doesn't pan out for Amazon!
Good post Josh! I think Amazon move wouldn't be as wise as expected. Maybe I think so because competition is 10 times harder when you are in a brick or mortar business just due to the fact that you are going to incur so many expenses over something that is not guaranteed; let alone in this economy. I think what makes Amazon "Amazon" is their huge online success but I guess trying something new would not hurt.
ReplyDeleteGreat post! For the Borders paper, I found a chart that compared the sales figures from Borders and Barnes&Nobles with those from Amazon. While Borders' and Barnes&Nobles' sales declined rose those from Amazon.
ReplyDeleteI think that Amazon can afford it to open their own brick and mortar stores. Amazon is a well-known brand and with their financial background, their high sales and profits, they can compete with the book chains. The only thing that I would recommend is to stick with the book section. Let's see what their management decides ;)
It would be nice to have one of these brick and mortar stores around here, especially for textbooks. The question is how much is it going to cost?
ReplyDeleteAmazon strength easily comes from lack of overhead costs by being mainly an online intermediary. As sales fall during this recession, they don't have to keep making that monthly rent payment on those brick and mortar stores. The deal i see in the future is cross retailer book wholesale, where you buy new on amazon and pick it up at a barnes or Walmart.
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