Amazon is said to be opening a trial brick-and-mortar store in Seattle to see if a chain of shops could be profitable.
Though this might seem like a step backwards for Amazon, the need to give its tablets and e-readers a physical shop window seems to be the main motivation.
Good E-Reader says sources 'close to the situation' suggest that the shop will be a small boutique rather than a giant book warehouse, and the emphasis will be on stocking the shelves with “only high margin and high-end items.”
They also will be stocking a ton of accessories such as cases, screen protectors, and USB adapters.”
It is suspected that the store will open in the autumn to take advantage of the holiday rush.
Amazon has previously avoided offline stores (and US sales tax in the process), but as it starts to roll out more own-brand products, it could be missing out on a valuable sales opportunity if it doesn’t offer customers a more personal shopping experience.
The company has launched its own publishing label, which several competitors are refusing to stock, and alongside its Kindle e-reader and Fire tablet it is rumoured to be planning to launch a smartphone later this year.
With this number of branded products, it makes sense to build a customised shopping experience to try and emulate the success of Apple.
Apple’s stores have proved to be popular with consumers, offering tailored customer service through Genius Bars. Plus, Amazon’s US competitor Barnes & Noble places its Nook e-reader centre stage within its stores.
Furthermore, while sales of Amazon’s Kindle e-reader have been strong it is selling each device at a loss in order to maximise profits on its digital books.
Amazon needs to make sure it keeps selling thousands of the devices to ensure it dominates the market for digital media - and one way of doing this is by taking on its competitors on the high street.
It could also be that Amazon has accepted that it can’t simply rely on other stores to act as its shop window.
Many consumers are used to going into a high street bookshop to browse the aisles and scan the barcodes on their smartphone before buying online. Waterstones in the UK has even started replacing barcodes with stickers to prevent shoppers from scanning the information.
Though it's quite a risk to base a long term business plan on piggy-backing competitors' pre-existing brick-and-mortar shops, Amazon's potential move offline is a big step for the e-tailer. It'll be interesting to see which products it stocks, and whether it can turn a profit and then scale this up.