February 8, 2012

Rumors of Amazon store intensify

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In the short time since MobyLives first noted the rumors about Amazon “All-Brick-And-Mortar-Retail-Must-Die” Dotcom opening a, er, brick-and-mortar retail outlet — you know, a store — rumors have intensified to the point where it seems like there’s something to them.

Other news outlets seem to be taking thie Reuters wire story seriously, in any case. It reports the company will be “dipping its toes into the physical world as the largest online retailer offers more products in stores that may benefit from hands-on interaction with shoppers. Analysts said the move may be inspired by the success of Apple Inc, which has hundreds of its own glitzy stores to show off iPhones, iPads and other gadgets and accessories.”

The more detailed report, though, comes from Michael Kozlowski at Good E Reader, who says the company …

… is planning on rolling out a retail store in Seattle within the next few months. This project is a test to gauge the market and see if a chain of stores would be profitable. They intend on going with the small boutique route with the main emphasis on books from their growing line of Amazon Exclusives and selling their e-readers and tablets.

Seattle is where Amazon’s main headquarters is based and is known as a fairly tech savvy market. It is a perfect launch location to get some hands on experience in the retail sphere. A source has told us that they are not looking to launch a huge store with thousands of square feet. Instead they are going the boutique route and stocking the shelves with only high margin and high-end items. Their intention is to mainly hustle their entire line of Kindle e-Readers and the Kindle Fire. They also will be stocking a ton of accessories such as cases, screen protectors, and USB adapters.

The company has already contracted the design layout of the retail location through a shell company …

In case you’ve been wondering how Amazon was going to respond to the fact that Barnes & Noble, Books-A-Million, and Chapters Indigo have announced they won’t carry books from Amazon’s new publishing line, this may be your answer.

The company isn’t commenting, natch (although it did firmly deny that it was opening stores in the UK).

But market analysts don’t seem to like the idea, though. In the Reuters story, one analysts says “such efforts could dent Amazon’s return on invested capital and hurt the company’s positive working capital dynamic,” and that “Having retail stores may also dilute the competitive advantages of Amazon’s online retail business, including vast selection and convenience ….” All of which leads the analyst to declare that “The initiative is just a test and a national rollout is not a forgone conclusion.”

There could be more reasons than one to come to that conclusion: Ss one MobyLives commenter noted on our report about the earlier rumors, “Amazon passed the point a while back where an anti-trust investigation should have started.  I can’t imagine putting in big visible reminders of their market dominance is the best move if they want to avoid that.”

 

Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House. Follow him at @mobylives

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