Rumors have been flying about that Amazon will be taking Apple’s lead and will open retail outlets for Amazon-label products. Interest was initially sparked by Jason Calacanis’s blog followed by a story in the New York Times Bits blog that speculated upon Amazon’s current interest in opening physical stores. Though no sources were mentioned in the NY Times blog, the Good E-Reader blog said that it had a source who had informed them of Amazon’s plans of opening a test retail outlet in Seattle within the next few months.
The source was also quoted as saying that the test outlet in Seattle was aimed at gauging their profitability in the physical retail outlet market and that the main emphasis would be on selling books and Amazon exclusives such as its readers and tablets. The source confirms that Amazon’s primary focus will be on selling physical books through its new publishing line managed by Laurence Kirshbaum, and that the company has already signed deals with a number of big names in the literary world. Some major publishers such as Barnes & Noble, Books-A-Million and Indigo Books have however, declined to sell physical books by Amazon.
In the past, Amazon has had issues with affiliate tax laws, with the company arguing that since it has no physical stores, it needn’t pay taxes in most states. But since state taxes are inescapable in Amazon’s future, it may have decided to put up stores on the ground in some metro cities to test the market and see how it goes.
While Amazon is reluctant to comment on any of these rumours, many feel that retail stores would be a wise move since it would help the company improve its relationship with customers by providing hands-on experience and customer service, such as those provided by brands such as Apple and Barnes & Noble. Amazon is not only seen as a brand with great potential to create a memorable in-store experience, it is also known for its remarkably low prices, which is in direct contrast with brands like Apple. Many question the viability of a business plan to sell the Kindle with physical books, especially when the prices of Kindle devices have only been dropping lower and lower.
Amazon has recently come across as being increasingly focused on gaining the status of a lifestyle brand and many are not sure as to whether the environment can be brought to physical stores. However, expectations from Jeff Bezos, the CEO and Chairperson of Amazon.com, remain high and it remains to be seen if the brand, popular for its famously low prices and great online shopping experience, can retain its charisma in brick and mortar.
