Why Amazon, eBay and Google are building bricks-and-mortar stores Even as offline retailers and other traditional "brick-and-mortar" businesses struggle to build their businesses online, some of technology's biggest online denizens are looking for ways to go offline. Google is the latest, reportedly opening a store in Dublin, Ireland, to sell branded merchandise, but it's just the latest in a …
I think the main plus point for Amazon doing this is one dismissed rather easily by a few bracketed words. The Kindle is a very tangible product that I think has to be seen to be believed. I don’t mean that in an “it’s so amazing” way, I mean that for many people whose interaction with screens and technology is a computer monitor or TV, they can’t imagine the benefits of e-ink if they haven’t seen it for themselves. Also, all the display units won’t be hogged by people using the store as a free internet café to check their Facebook and other things that get in the way of potential, real customers
Taking a walk down 5th Avenue in Manhattan one passes, just north of Rockefeller Center, the Coca-Cola store, the NBA store, the Disney store, and maybe some other which I am forgetting. These store are solely "vanity enterprises" - they probably contribute next to nothing the bottom line of their respective owners. Most of the IT stores will probably be about the same.
Sales tax is a non-sequiter. In the US, if you order a product from across state lines (i.e. from a catalog or on the Internet), you don't pay sales tax; instead you pay a use tax, which is invariably set at the same rate as the state sales tax. Certainly it is easier to defraud the state on use tax as opposed to sales tax, but neither one affects the pre-tax price of the product.
It is the pre-tax price of products that is generally cheaper at Amazon. No *fair* amount of taxation is going to fix that.
You can add rent, utilities, insurance, wages, health care, training, extra losses due to theft and all the additional local, state and federal taxes that made Amazon's on-line strategy competitive in the first place. The area where Amazon could save money with retail is in delivery but given Amazon's very low margins that's probable a profit centre for it. So if it can't sell the products for less or at the same price with at least the same margins and I would say it cannot, then why bother?
OK. I know that geeks tend not to be the snappiest dressers out there [socks'n'sandals, and all thon], but I can just about get my head round the idea that, in their circles, donning a Firefox or Linux T-shirt could be construed as making some kind of statement of non-conformity.
I'm also prepared to believe that, in the same company, much knowing hilarity may result from spotting a slogan such as "There's no place like 127.0.0.1" across a colleague's chest.
But my credulity refuses to stretch anywhere near far enough to countenance the existence of an individual, so totally bereft of dress sense that they would voluntarily clad themselves in apparel adorned with the Google logo [never mind there existing enough of such sad creatures to make devoting an entire shop to Googo-tat a viable financial proposition].
Can there be a more insipid, offensively inoffensive sartorial statement to make than announcing to the world that "I search the intarwebs for things"?
This summer, will Brighton beach bear witness to running battles between tooled-up rival gangs, dressed in opposing Google or Bing 'colours'?
At least we are spared the need to 'think of the children', as a Google T-shirt doubtless acts as a very strong form of contraception.
Those much lauded products are crap. The real reason for the success is the massive never ending hype/marketing effort honed to perfection by the master snake oil salesman and known liar and all around jerk.
The brick and mortal is all about vanity and hubris that infects those at the top when they strike it rich online. There is no bottom line justification for these ventures.
I think the quality, as well as the source of the Snake Oil is what stroked their "vanity and hubris".
Retail Salesmen are never out of stock on these products. The onus is on the customer to "keep shopping". It's very likely that a UK Retail Salesman will point you to a web site (non-B&M) in Indonesia for "comparison" even though their competitor's store is visible from the front door. It's the game, you see.
I think there could be a market in the UK for a store where you could have your purchases delivered, and even order using a PC in the store (O.K. Argos on steroids).
Hmmm....could this save the local libraries?
This removes the major barrier to online shopping - being there to receive the delivery.
This is one area where the traditional Royal Mail scores heavily - there is usually a local delivery office where you can pick up packages if you are not in when they arrive.
However this is not really an Amazon thing unless they branch out and receive packages from all carriers from all online stores.
Is this just an indication that the online market is becoming saturated and the demand for revenue growth is forcing increasingly marginal and desperate 'strategies'?
Or is it, as suggested above, just a vanity move with a store in each major capital?
Cheers
Dave R
I tought Yodel, are what was DHL Express?
What I don't understand is the HUGE department store-esque M&Ms World on Leicester Square. Surely this is a prime/expensive location in London and it is a 4/5 storey shop selling t-shirts wth pictures of chocolate beans on them. Is this what the Google and Amazon stores are going to be about?
If you look at the possible brick & mortar options for Amazon, it starts to look a bit like Argos on steroids - and it also looks exceptionally unfeasible as a business model.
Argos have cornered the market for a multi-product catalogue style brick & mortar offering, working on the low to middle income groups - easy credit is the root of their success, without that, they would fail.
The reason Argos continues to exist in a climate where most people would choose to buy online, is because of that credit.
So how would Amazon compete - I can't see it myself.
Google? Why?
Ebay? How?
Can't see it myself.
Turn up, they have most common products on consignment stock (supplier lodges in warehouse free until purchased) so most of the goods fulfilled by Amazon. You turn up and select from Amazon interface with the knowledge its in stock locally or will be available next day.
No annoying sales people who walk up while you are reading the label and say can I help you, you ask them a question NOT on the label. They then read the label to you as if you are thick missing the point the information supplied is not helpful or accurate. Then try to close on you.
If they keep the peer reviews, beef up the technical side, have decent displays, get the supply chain sorted and have decent parking they may be successful.
Got annoyed with Argos when they took the product demos out of the stores.
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