Rumors began circulating this morning that Amazon may be looking to shake off its reputation as just an ecommerce force by launching a retail store test in Seattle.
Since Amazon.com went online in 1995 it has only been known as a giant of the ecommerce industry in spite of it being blamed for the closure of many physical retail businesses including the entire Borders chain. However, a new rumor that began circulating this morning is sure to send shivers up the spines of many retail store chain executives as it appears that Amazon may be looking to dip its toe into the retail storefront arena.
Good e-Reader is reporting that sources close to the situation have informed them that Amazon is looking to open a boutique-style store in the Seattle area some time in the next few months. This store reportedly won’t focus on being a big box store with thousands of square feet of sales floor, but instead will be more along the lines of a focused retailer that sells mainly high-end, high profit margin items, with, of course, a heavy focus on Amazon specific items like the Kindle line and the company’s new publishing label, Amazon Exclusives.
It seems obvious that Amazon will be modeling themselves after the hugely successful Apple retail stores. As Amazon has expanded into making more and more of its own products, it makes some sense that they could follow in the Cupertino-based companies footsteps that have shown you can sell a relatively low number of your own items, throw in some accessories such as cases, and make yourself into a destination store without much trouble. The only thing that the online retailer would have to potentially watch out for is that it has avoided charging sales tax in many states because they had no physical presence in those locations. Opening a chain of retail stores would change this dynamic very quickly and take away one of their key advantages in the online sales space. Are the potential sales that Amazon could lose from its online division be made up for from going into retail? Apple stores averaged $17.1 million per store in the latest quarter, compared to $12 million per store from the same quarter last year, an increase of 43 percent. That’s a hard number to ignore, there is also a world of difference between a $199 Kindle Fire and a $499 iPad 2.
For now, if this rumor is even true, the test will be limited to Seattle, the home city of the online retailer. Amazon has had some previous tests that have remained local to the Seattle area such as Amazon Fresh, and other tests they ran such as AmazonTote that were killed off all together. We’ll just have to wait and see if this retail movement becomes a reality or not, but there may very well be a day where you could tell your friends you’re running down to the Amazon store.
[via Good e-Reader]