Is Amazon a Mall Rat?
Can you teach a new media company some old media tricks?
We may find out whether Amazon.com (NAS: AMZN) is ready for its consumer-facing bricks-and-mortar debut.
Sources are telling Good E Reader -- a website for e-reader and tablet news -- that the leading online retailer is gearing up to open its first retail store in the coming months. Rather than take a chance on a trial balloon in a distant test market, Amazon's store will open in its home turf of Seattle.
How can a company that called itself "Earth's Biggest Bookstore" in the 1990s -- before it got really big -- pull off a shopping experience in the tight confines of limited mall space?
Well, the strategy is simple. Amazon's store will simply sell its Kindle products and accessories, modeled after the success that Apple (NAS: AAPL) has had moving its proprietary electronics. If Microsoft (NAS: MSFT) can successfully ape Apple's model in opening up a couple of stores, why can't Amazon follow in their footsteps by giving tech a branded retail turn?
Anchored by Apple
Apple's success has made it the envy of every mall landlord. Microsoft's foray seemed comical at first. Would guests enter through a blue screen of death? However, Mr. Softy hasn't embarrassed itself here. There are now 14 Microsoft Store locations, and more are on the way. Why not Amazon?
It won't just be Kindle e-readers and tablets for sale. The Amazon boutique will also stock books from its Amazon Publishing subsidiary. If Barnes & Noble (NYS: BKS) isn't up to selling the physical books through its namesake stores, Amazon may as well show its authors some bricks-and-mortar love.
If the rumor proves true, this wouldn't be the first Web-based retailer to open a mall store. Wal-Mart (NYS: WMT) -- yes, Wal-Mart -- opened a pair of walmart.com stores ahead of last year's seasonal holiday push.
The difference here is that Wal-Mart doesn't have a proprietary product line to market to shoppers. It just used its small selling space -- which in one of the stores amounted to a mere 1,000 square feet -- to stock hot-selling media items and gadgetry. Laptops were available for mall shoppers to browse through the discounter's massive virtual aisles. It will be interesting to see whether Amazon follows suit with its own fleet of Amazon.com-tethered Kindle Fire tablets.
Don't expect to walk into an Amazon store anytime soon unless you happen to be living in the Seattle area. It's taken Microsoft nearly three years to get to where it is today, and Amazon will probably make sure there are no state sales tax implications in areas it does target for expansion if the first store is a hit. However, it will be an interesting move by Amazon, especially reaching out to shoppers that are in a mall because they have never truly warmed up to Amazon.com.
"Amazon Store" may not send shivers down Microsoft's spine, but do you know the two words Bill Gates doesn't want to hear. Stumped? A timely report has the answer. It's free, but only for a limited time so check it out now.
At the time this article was published The Motley Fool owns shares of Apple, Amazon.com, Microsoft, and Wal-Mart Stores. Motley Fool newsletter services have recommended buying shares of Apple, Microsoft, Wal-Mart Stores, and Amazon.com. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft. Motley Fool newsletter services have recommended creating a diagonal call position in Wal-Mart Stores. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.Longtime Fool contributor Rick Munarriz owns a first-generation Kindle and a Kindle Fire. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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