Warc Blog

Amazon keen on retail stores

20 November 2012
NEW YORK: Amazon, the ecommerce pioneer, would "love to" open a physical retail network, but only if it is able to create a truly differentiated experience, according to the company's chief executive.

Jeff Bezos, CEO and founder of the online group, told PBS in an interview that his firm was interested in establishing a bricks and mortar chain, albeit solely upon meeting certain key conditions.

"We would love to, but only if we can have a truly differentiated idea. We don't do a 'me-too' product offering very well," he said.

"If a hundred companies are doing something, and you're hundred and first, you're not really bringing any value to society. And, typically the business results are not very good for something like that."

More specifically, Bezos argued the current market leaders are "very good" at their craft, meaning formulating a new idea, selling point or capability is vital to avoid being "redundant".

"We want to do something that is uniquely Amazon, and if we can find that idea, and we haven't found that idea yet, we would love to open Amazon stores," said Bezos.

Sucharita Mulpuru, an analyst at Forrester Research, the insights provider, said the best approach for Amazon may be similar to that adopted by Apple, the electronics firm running sleek, high-end stores.

"I think their best shot is an Apple-like experience," he said, with Microsoft enjoying some success with the "same idea". "Add on in-store pickup of your Amazon orders and they're golden," Mulpuru added.

Jerry Storch, chief executive of Toys R Us, asserted that physical retailers have two core advantages over their digital rivals, which are "ungreen" and make it "very expensive to ship product".

"Established store retailers add more internet, and the internet-only guys add stores and other physicality," he said, according to the Financial Times. "It's so clearly the future model that it almost seems ridiculous that we're debating it."

Best Buy, the consumer electronics chain, has been hit particularly hard by the rise of platforms like Amazon, with many shoppers using its stores as a "showroom" before buying on line.

However, Hubert Joly, Best Buy's recently-appointed chief executive, told the Associated Press even this trend is not inevitable. "Once customers are in our stores, they're ours to lose," he said.

Data sourced from PBS, Financial Times, Associated Press; additional content by Warc staff

 
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