There has been a rumor floating around that Amazon (AMZN) plans to open physical stores. Really?! Stores?!
Amazon is a known quality in the online retail space -- it's the industry leader. That's a great place to be right now. On Black Friday, overall retail sales edged higher only 0.5%, but online action spiked 35%. Let's do the math, why the hell would anyone move from zeroes and ones to bricks and mortars?
But there must be something to the rumor. Well, landlords in Britain say that Amazon is looking to launch shops in Britain to complement its online operation. The retailer is trying to bring in some cash through the growing "click and collect" market in which consumers shop online and pick up their purchases in person. The upside of this approach is that consumers won't have to wait for shipping, allowing them to scratch their retail therapy itches immediately.
But Amazon denies this and wouldn't provide any additional comment on the matter.
If this plan is really in the works, I'm of two minds on this move. On the one hand, it does solve the impulse buy problem for online retailers and takes away one of the few remaining supports for the traditional physical stores run by a wide spectrum of competitors such as Best Buy (BBY), Macy's (M), Wal-Mart (WMT) and Target (TGT). It also opens the door to a new revenue stream. But on the other hand, it brings in some fixed costs, which can become hefty if the model were to be expanded. Nonetheless, I like the limited approach with a handful of locations in the U.K. -- date a business model before marrying it.
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