Amazon to Open First Brick-and-Mortar Location
online.wsj.comhttp://www.engadget.com/2014/10/09/amazon-store-manhattan/
Seems unnecessary. I guess Amazon is getting so bored making money in sane ways that they want to lose money in insane ways.
In many urban areas it can be challenging to receive packages, so having a pickup spot in the middle of several million people could well make sense.
Apple's flagship Manhattan store famously does quite well as a showcase for their products and helps to sell millions for them. Amazon could be doing that math that for every user we get into the ecosystem we can extract X in lifetime value from book, video and app purchases (again a way it could make sense).
Also, you can consider this maybe Amazon trying to become Walmart faster than Walmart can become Amazon. Having physical stores still counts for much in the retail sector, having one (or a bunch) would potentially give them leverage and more options. They _already_ have a massive nationwide system of warehouses and logistic centers, is it that crazy that they could move products into brick and mortar shops as well as the presumably much more complicated process of people's homes?
No it doesn't, you're not going to use some of the world's most expensive real estate for a pickup counter. That's the point of Amazon lockers in 7-11 stores and so on, you don't want to make people go outside of their neighborhood just to pick up a delivery. In a dense urban area that means within a few blocks.
I don't know as much about NYC geography, but if they put one of these somewhere in the loop in Chicago I would definitely use it. I would much rather spend my lunch break walking down to the Amazon pickup depot than let a package sit on my front door all day.
None near my Chicago zip. Loved it in LA though.
Another Chicagoan here, I'm actually the exact opposite. I'd much rather have my package sitting in the lobby of my apartment than going down to Michigan Ave, dealing with a bunch of tourists, and waiting in line to pick up, idk, a big box of paper towels because I'm too lazy to go to the grocery store?
I live in a 3 flat and most of my Amazon packages sit just outside our building in plain sight. If the UPS guy had the skeleton key that the USPS has, I'd probably feel differently.
Have you ever had a package stolen?
Doesn't having to pick up a package defeat the purpose of delivery?
If I wanted to pick up packages, I'd go to stores and buy things. I don't want to go to the store though, so I pay Amazon to deliver it to me.
Many of the things I buy on Amazon I buy because I can't find them at all in local stores. Sometimes they are just cheaper too, but that really is why I would use a local Amazon store. I wonder if this will also make some things like pet food which aren't really suited to ecommerce more viable for them. Maybe they wouldn't offer vastly cheaper shipping if you want any brand but would stock some staples like that too.
Well sure...if you can find a store that stocks every item that Amazon has, has no lines, doesn't require searching for the physical product on their shelves (this is of course replaced by Amazon.com's search fxn at time of purchase). You surely can't be serious in saying that there's no advantages to conveniently located Amazon package pickup over a conveniently located store...
I make use of in-store pickup options from time to time - sometimes it's nice to get your hands on your order the same day - order it at 7pm, have it by 8pm.
What it comes down to for me is, I don't hate going to the store, I hate shopping at the store. Typing "16GB USB Drive" into the search box is much easier than wandering down multiple aisles trying to figure out whether that particular store put the USB sticks with the laptop accessories, the camera storage, the office supplies, on some unrelated endcap, or behind the guy standing inconveniently in front of the display I'm trying to look at.
But what if you've got a parcel machine on your regular route ?
And don't forget, the costs can be much lower when using parcel machines. For example in latvia ,it costs 2 euro to send a package from a postal machine to a postal machine, versus 3.6 euro from a postal machine to someone via courier.
And e-commerce users really hate to pay for shipping.
Cost to become Wal-Mart: $62,655,000,000
Based on store counts times conservative numbers on the total cost of a new Wal-Mart. They might try building a bunch of small stores, but they're definitely not going to try to become Wal-Mart.
They want to skate to where the puck is going to be, not to where it is. We can be certain that the Walmart of ten years from now will not be identical to the Walmart of today. Part of that difference will be Walmart's reactions to Amazon's own actions, but mostly it will be changed consumer expectations. Do you enjoy shopping for toiletries and similar consumables?
I'm not so sure. I think the future of consumer durables is showrooms with very little inventory but a huge number of things on display. If you want it right now, you pay full price, but if you want it delivered tomorrow (from your local amazon warehouse) then it's 10% off.
In other words you no longer 'go to the store' because it's economically inefficient to store many units of the same thing on expensive prime real estate. Instead almost all the warehouse space of existing stores is turned into floor space and they only have 1 of each item, although they keep a small stock of consumables.
Amazon has recorded a net loss 4 out of the last 6 quarters. Read into that what you will, but I don't think they're in any position to 'get bored making money'.
http://services.corporate-ir.net/SEC/Document.Service?id=P3V...
It's pretty well known that Amazon intentionally reinvests all of its profits (and then some) back into new business ventures.
So perhaps it would have been more accurate to say "getting so bored expanding into new markets."
Though I agree, it does sound insane. What would they stock? They can't supply everything obviously. I think it will be a good outreach to put a face to the company you're buying from, and make it more personal. I'm sure the employees will have little Kindles so you can quickly order things in stock. And gain the confidence from buyers that are hesitant buying things from online retailers. Potentially this could hurt stores like Best Buy, or the like. If Amazon can provide a better customer service in person, than people will choose them over the other. I'll be curious to see how this plays out for them.
"Though I agree, it does sound insane. What would they stock?"
???? I would expect they are only going to stock amazon stuff. Maybe amazon branded + amazonbasics.
Why would they stock anything else?
To me, this seems like a fairly obvious play: They have had trouble getting playing with fire branded stuff in their internet and tv-only campaigns. People actually want to play with the devices.
Given the choice between buying space in best buy among tons of other companies, and leaving it to the whims of blue shirted people to sell their stuff, or doing it themselves, they chose "doing it themselves".
That seems sane to me.
While I agree with you that it would definitely help their sales by selling it themselves vs. the blue shirts. I can't seem to think they will only sell Amazon products. Not to say they will sell substitutes of their products as well, I think it would be a missed opportunity to stock it only with Kindles, and Fire Phones. It would be surprising to me at least, if their main objective with this store front was to increase sales of their products alone. I could envision them being a big box in the future with stores around the US. They've already got a lot of warehouses to back something of that caliber up.
If they get into selling other people's stuff in person, they then have to compete with other people in the area on those prices, deal with support for those devices when they break. They also have to deal with all the attendant supply chain issues, etc.
Supply chain for a warehouse is different than supply chain for the store. If too many people in alabama want something tomorrow that isn't in alabama warehouse, they overnight it from vegas and pay the price. If too many people show up to buy something in the store in alabama, they are simply out of stock. In one case, they make a sale and pay a little more overhead. In the other case, they probably don't make the sale.
Additionally, right now their support is limited to "we click buttons, you repack stuff, and we ask UPS to take stuff back to us". The average brick and mortar store provides a lot more support than that.
They already deal with a lot of this for kindle products, but not other peoples.
For other people's products, I can't see them wanting to get into this business, it's a rathole, and only serves to help others more than them :)
I don't think they will get into the business of selling tvs in a big box, for example, right up until best buy dies. I think they are perfectly happy with "people try stuff, then buy it on amazon", and i don't see why they wouldn't be.
In short, i have trouble seeing why they would want to be a big box in the future. Their entire business model is based around the idea that being a big box is inefficient.
I guess I am being too optimistic. I really enjoyed reading that response, and you brought to mind a lot of things I just didn't really consider. Supporting other peoples devices would be a hassle, and a huge undertaking who does zero of that currently. Since you've debunked my theories :), rethinking it maybe it's just a great way to advertise, and get people touch, and feel the phone in person with a great salesperson next to them. The article I think said it is suppose to be up before the holiday season. And why run a test store in New York, New York? I wouldn't ever suggest doing a test run in an extremely high end area like that. Maybe it's up for Nov, Dec, Jan.. and than disappears.
It makes sense to me too. I've never owned an Amazon device, or (I think) even touched one. I've heard middling things about them, but holding one in the hand could be enough to persuade me to pick one up.
I don't think they would have too much trouble knowing what to stock, they would just look at their sales. Stock the most popular items, new releases of movies/books/games, and phones, tablets and PC's.
On the other hand, that would make them nearly equivalent to any of the other "brick and mortar" businesses. I wonder if they want to focus on showcasing their own products, like an apple store. They have been pushing the advertising on amazon fire TV and phone a lot.
Why not have the stock respond to people? Amazon can probably have their stock be adaptive.
You mean like that phone experiment..yup.
Amazon makes a lot of money - but they also spend a lot. They have pretty slim margins.
Since we all don't have a wsj account...
http://www.marketwatch.com/story/amazon-to-open-first-physic...
And if you do, simply take the title, and dump it into Google. The wsj has a stupid rule where they won't require you to have an account to read the full article if your referrer is google.
I created a small greasemonkey script to set the referrer on all wsj websites to google. Works like a champ!
> I created a small greasemonkey script to set the referrer on all wsj websites to google. Works like a champ!
Gist please!
EDIT: Quick google search found it: http://userscripts-mirror.org/scripts/review/72558.html
Isn’t that against Google’s T&Cs? I’m sure a website is not allowed to present different content to GoogleBot than it does to regular users. Not sure if there’s a rule that says it can’t present different content when a user clicks on a search result vs goes directly to the website or from another referrer.
They're probably using "First Click Free". See http://googlewebmastercentral.blogspot.com/2008/10/first-cli...
Thanks for this. Good to know about it.
I assume this will be more of a Kindle showroom with a bunch of Amazon lockers for product pickup. They're always trying to reduce shipping costs and having people pick stuff up is a good way to keep the shippers on their toes.
This is probably to help feed the media buzz when they release a new Kindle or such.
TV loves these " people in Manhattan queued all night in front of the store in anticipation of iThingy 15.7 "
Yes, which are almost as useless as the "sold x million first weekend" metrics that get parrotted by media.
If the user base increased by 50% between the two releases, they can convince 50% less people to upgrade the first weekend, and still sell more the first weekend than they did last time. The sold x million certainly tells you some hard dollar number that is uninteresting, but it gives you no idea how popular the device will actually be, even though it sounds like it should.
So, like Argos, but with the internet and stuff. And presumably with better fixtures.
Amazon has nothing to lose from this store.
- They will ride the media wave when a product launches/when they do a stunt like drone delivery and have people waiting outside.
- You can bet they will be testing in-house tracking/advertising by analyzing their customers' actions under their own conditions
- You can bet they will sell at least a small number of their flagship products
Kind of surprising that they didnt already have a brick-and-mortar location.
UX: Relentless body and eye tracking from the moment you walk in. Physical identity linked to your Amazon account. No opt-out. No cash payment. Tight integration to online experience. Customer is seated beside a large touch screen, product arrives kaiten sushi style. Some visibility of robotic pickers behind the scenes. Reservation of seating days in advance.
Shut up and take my money! Can you install one of these things on my toilet?
I'm sure someone can find a niche for it. Stock "deal of the day" items, top sellers, small items (not worth cost of shipping but buyers willing to drive to get), and ship-to-store (lowered shipping, don't worry about shipper leaving it on porch to get stolen). Also provides a live face for service.
How many warehouses does Amazon operate in the suburbs outside NYC? I bet they can already do same day delivery on lots of products. Will be interesting to see what inventory they put on display here. Or how its innovative? Maybe giant interactive walls where they let you browse tons of their stuff thats upstairs?
We have those (sans giant walls) in the UK.
They are called Argos.
http://girlinlondon.com/argos-inside-one-of-the-uks-most-pec... for a good description.
I thought of a similar idea one day when day dreaming at my old retail job. What if in the future, all the stores become so small, malls could house 1000s of stores. You could go in, touch the product, try it on, but they were all just display models. And than you'd order it in store, and it would be on your doorstep the next day. No need to keep inventory in the store, and you pay a much smaller rental fee. And shrink could be almost reduced to zero.
Here in the UK that's how many shops (and some chains that are still extant) started out.
You went into the local grocers which had a counter/hatch (think post office/bank), You told him what you wanted (or he your weekly order) and he (or usually his boy) would then drop the merchandise off at your house.
The Supermarkets pretty much paid to your corner grocer (economies of scale, later opening hours, more variety of items, the ability to do your shop yourself as and when needed and the increasing wealth of the UK (cars and refrigerators)).
It would be amusing if we went back to a high tech version of that.
If you go to the local Best Buy, they're already on their way to this model. They have Apple, Samsung, Nintendo, and now Microsoft mini-stores within their large space.
Someone has already picked up on the "micro-mall" phrase. They're running a store where merchants rent display space, and they handle the cash registers and stocking for them.
http://thevillageindoormarketplace.com/become-a-merchant/mic...
Seems cool. Picking up from a store can be useful when it's something you're worried about sitting on your doorstep all day. Could be a great way to improve customer service as well. I'm curious as to whether the store will actually stock non-amazon products.
> Picking up from a store can be useful when it's something you're worried about sitting on your doorstep all day.
This is almost certainly not the main intention of this move, since a store is waayyyy more expensive than a locker and no more convenient, and Amazon has had lockers for a looong time (I can't receive packages at my house so I use the locker one block away extensively).
My friend has the opposite problem--- all packages go to the apartment manager's office. And his hours are allegedly 10-5, but he leaves early all the time. She picks up her packages at an amazon locker because the manager keeps the packages too secure.
I'd be curious what proportion of public facing space would be lockers.
I imagine it'd be great to showcase flash sales and extremely high demand items. I really believe a retailer selling physical goods needs some sort of physical presence and hope this is something interesting.
They could easily sell displaying space too for a monthly cost.
They ship by drone from the warehouse to the store in 30 minutes. You order something, 30 minutes later, after you drink an expensive latte and use their free wifi to watch some TV show from their network, you get your hard-to-find item, and you go home happy.
Wonder how long it will be until we start seeing subdivisions built around Distribution Centers, with robots delivering the goods almost immediately after ordering. 20 years?
With robot cars doing most of the work? Maybe 10 years, though it's hardly necessary that the subdivision gets build around the DC when you can build a DC close enough to the subdivision to make it worth your while.
Why? Their entire competitive advantage & business approach is based on the opposite?
Because they need a way to let people play with things like fire hd, and can't rely on best buy to have their best interests at heart?
People buy stuff off Amazon without playing with it first all the time? I did & I'm not even in the US (Kindle).
I can see a Manhattan store working as a novelty type deal but beyond that Amazon is online in my books.
Time to buy BestBuy stock. They just became an acquisition target for Amazon.
I could see Amazon using this as a NYC media presence, as much as a store. They could do readings by authors, launch events for Amazon original video content, Kindle product launches, and so on.
Also, six foot HDMI cables. Everybody needs those.
Reminds me of the eBay store scene from The 40-year-old Virgin:
https://www.youtube.com/watch?v=uGxRg5I7r5s
The future of e-commerce is bricks and mortar (?!)
That wasn't an eBay store, but her job was selling other people's junk on eBay for them. As for the future of e-commerce, it's whoever can get the product to me fastest. Brick and Mortar still wins that race, but lose on price more often than not.
There are a lot of products that bricks and mortar lose on, simply because they can't carry the diversity of inventory that ecommerce shops can access.
Agreed. It's on the b&m stores to keep a product mix that will sell the most efficiently, and the ones who are surviving are the ones figuring that out. I'm lucky enough (or unlucky, depending on perspective) to live in a city with a Fry's - there aren't a lot of products NewEgg can win on if I'm feeling impatient, for example.
Not sure why that comment got voted down. If that's wrong I don't want to be right.
Paywalled.
See my comment above. Dump the title into google, click through and you're good. wsj won't paywall you if your referrer is google.
It still paywalls me from google.
^