Would a retail store be the right move for the Amazon brand?

February 15, 2012

A rumor is spreading that Amazon may open a boutique retail store in their hometown of Seattle later this year, just in time for the next holiday season.

The site Good Ereader broke the story, which reports that the store would likely be “stocking the shelves with only high margin and high-end items.” This would include Amazon’s Kindle e-Reader line and the likely the first of its titles from the brand’s publishing division, which will also be released later this year.

Amazon’s success to date has been driving consumers away from traditional brick and mortar retailers, so it’s only natural to consider whether this seemingly counterintuitive move would be wise for the brand. It’s certainly a risk, but one that offers a huge reward for Amazon, if well executed.

Some commentators are raising the concern that because Amazon is known for its vast online selection, consumers will be disappointed with the store’s very selective offering. Yet, the experience can be successfully positioned as a chance to specifically get to know Amazon-branded items, and supplement the broader online shopping experience. A retail setting would enable the brand to increase exposure to Amazon products and allow consumers to test them first-hand before making their purchase.

Amazon has already witnessed successful online sales of its Kindle line of products. The line is also currently sold at other retailers including Target, Best Buy and Staples. However, retail stores would enable the brand to define a new meaningful interaction with the product line and its brand overall. Amazon would be able to fully control and define its retail experience, and go far beyond a small store display accompanied by the Amazon logo.

It’s hard not to look to Apple for support. Prior to 2001, Apple wasn’t yet in the retail space and its decision to open its first stores was dismissed by many as a foolish move. Today, not only is the Apple retail experience a key facet of the Apple brand experience, but the venture has also been extremely lucrative. Based on a report by RetailSails last summer, Apple stores collectively yield more sales per square foot than any other U.S.-based retailer.

Ultimately it’s a risk for Amazon, but, if done right, the move can yield significant long-term benefits for the brand. A positive and meaningful retail brand experience can reinforce and strengthen a consumer’s relationship with the brand and likely yield greater brand loyalty.

What do you think the effect of opening retail stores would be for the Amazon brand? Let us know by participating in our poll.

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