Monday, March 12, 2012

Why Amazon would want to become a brick-and-mortar retailer

Amazon's recent decision to open a physical pilot store in Seattle garnered a lot of attention, including confused head scratching from those who feel that being purely internet-based in a better model.  In response to this head scratching recently wrote this comment in a discussion in RetailWire:
It's pretty clear that the e-reader market is going to transform pleasure reading in a fundamental way and that whoever owns the reader has a massive advantage in this new book marketplace. And suddenly Amazon's virtual-only advantage becomes a disadvantage. Apple and Barnes & Noble are out there putting their e-readers in stores where people can hold them and play with them. That's the fundamental strategy behind Apple stores with all the company's products, and Apple stores outperform any other retailer on a profit per square foot basis by a factor of two to one. And Barnes & Noble gives big air time to Nook, putting the Nook store in the best place in the establishment. The Android tablet gets a lot of attention in the thousands of Verizon and AT&T locations across the nation and similar treatment from other carriers in other markets worldwide.  And even Windows Mobile appears in the twenty or so Microsoft stores operating across the nation today (with surely more on the way).
These examples show Amazon the power of brick-and-mortar retail in winning that e-reader computing platform which will keep earning and earning for years to come. I believe with the company's deep pockets and the amount of revenue that's at stake, that it's well worth Amazon's while to figure this one out.

No comments:

Post a Comment