Amazon.com Inc. (AMZN) Mimics Apple, Opens Retail Stores in Malls

Amazon.com (AMZN) Amazon

Amazon.com Inc might have learned a lesson or two from Apple. Amazon is now moving from selling stuff online into having a physical presence by opening stores in malls and other prime locations. Jeff Bezos started experimenting with the idea of physical stores when it launched physical bookstores  in Seattle, San Diego, and Portland.

Apple perfected the art of creating brick and mortal stores designed to introduce people to its products. Apple stores are also staffed with consumer-oriented staff whose duty is to leave you alone or offer you information and advice on any of Apple’s products or services.

Amazon.com Inc (NASAQ:AMZN) Brick and Mortor Stores

As of May, eMarketer reported that Apple makes about $5,546 per square foot in its stores to record the biggest sales per square foot among retail locations globally. In fact, Apple is the first on the list to outperform other highbrow brands such as Tiffany & Co and Michael Kors. Now, Jeff Bezos wants to replicate Apple’s success with physical stores where it hopes to introduce and sell its devices to people.

Meet Amazon Stores

Amazon.com Inc is set to open as many as 100 new physical stores in the next couple of months in addition to the 16 stores it already has in operation. Jeff Bezos thinks that he could introduce people to the hardware products and devices that his firm makes in the mobile tech segment. The firm has its Kindle eBook readers and it has dead-on-arrival Fire Phone. The firm also has Fire Tablets, Fire TV, and Alexa-powered Echo speakers.

In addition, the firm sells a number of products that could help it steal market share from both Google’s Android OS and Apple’s iOS. For instance, the firm sells a Lightning cable that is 50% cheaper than Apple’s Lightning cable. The fact that Apple is depending on the Lightning port for charging and connecting earbuds in the iPhone 7 could actually make the accessory a top-seller in Amazon stores. More so, Amazon sells a highly subsidized Android smartphone that show ads on the lockscreen.

Interestingly, Amazon has high hopes for its physical stores and the firm is aggressively hiring new workers to fill up strategic positions in different locations. The wordings of the firm’s job posting revealed that the firm is “looking for a Sr. Vendor Manager to help us scale our new offline direct retail business.” The firm also notes that it needed to make some quick hires because the “pop-up stores have emerged from the test phase with a goal to expand and grow.”

Can physical stores make a difference in the bottom line?

Amazon plans to open 100 physical stores in the next couple of months but skeptics would be quick to point to the venture as a wild goose chase. After all, the firm controls the largest online marketplace in the west and it doesn’t make sense to compete with brick and mortal stores who are already losing their clients to online stores.

However, Amazon’s decision to start opening physical stores is both operational and strategic. From the operational standpoint, the stores would serve as a place for people to interact with Amazon’s devices in the real world so that they can make a purchase decision based on experiential knowledge,

From a strategic standpoint, the stores would furthermore drive traffic to amazon.com. To start with, the stores are located in high-traffic areas within shopping malls. Hence, many people will notice Amazon devices in the stores and they’ll online to research and obtain more information about the devices.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.


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