In many urban areas it can be challenging to receive packages, so having a pickup spot in the middle of several million people could well make sense.
Apple's flagship Manhattan store famously does quite well as a showcase for their products and helps to sell millions for them. Amazon could be doing that math that for every user we get into the ecosystem we can extract X in lifetime value from book, video and app purchases (again a way it could make sense).
Also, you can consider this maybe Amazon trying to become Walmart faster than Walmart can become Amazon. Having physical stores still counts for much in the retail sector, having one (or a bunch) would potentially give them leverage and more options. They _already_ have a massive nationwide system of warehouses and logistic centers, is it that crazy that they could move products into brick and mortar shops as well as the presumably much more complicated process of people's homes?
No it doesn't, you're not going to use some of the world's most expensive real estate for a pickup counter. That's the point of Amazon lockers in 7-11 stores and so on, you don't want to make people go outside of their neighborhood just to pick up a delivery. In a dense urban area that means within a few blocks.
I don't know as much about NYC geography, but if they put one of these somewhere in the loop in Chicago I would definitely use it. I would much rather spend my lunch break walking down to the Amazon pickup depot than let a package sit on my front door all day.
Another Chicagoan here, I'm actually the exact opposite. I'd much rather have my package sitting in the lobby of my apartment than going down to Michigan Ave, dealing with a bunch of tourists, and waiting in line to pick up, idk, a big box of paper towels because I'm too lazy to go to the grocery store?
I live in a 3 flat and most of my Amazon packages sit just outside our building in plain sight. If the UPS guy had the skeleton key that the USPS has, I'd probably feel differently.
Many of the things I buy on Amazon I buy because I can't find them at all in local stores. Sometimes they are just cheaper too, but that really is why I would use a local Amazon store. I wonder if this will also make some things like pet food which aren't really suited to ecommerce more viable for them. Maybe they wouldn't offer vastly cheaper shipping if you want any brand but would stock some staples like that too.
Well sure...if you can find a store that stocks every item that Amazon has, has no lines, doesn't require searching for the physical product on their shelves (this is of course replaced by Amazon.com's search fxn at time of purchase). You surely can't be serious in saying that there's no advantages to conveniently located Amazon package pickup over a conveniently located store...
I make use of in-store pickup options from time to time - sometimes it's nice to get your hands on your order the same day - order it at 7pm, have it by 8pm.
What it comes down to for me is, I don't hate going to the store, I hate shopping at the store. Typing "16GB USB Drive" into the search box is much easier than wandering down multiple aisles trying to figure out whether that particular store put the USB sticks with the laptop accessories, the camera storage, the office supplies, on some unrelated endcap, or behind the guy standing inconveniently in front of the display I'm trying to look at.
But what if you've got a parcel machine on your regular route ?
And don't forget, the costs can be much lower when using parcel machines. For example in latvia ,it costs 2 euro to send a package from a postal machine to a postal machine, versus 3.6 euro from a postal machine to someone via courier.
And e-commerce users really hate to pay for shipping.
Based on store counts times conservative numbers on the total cost of a new Wal-Mart. They might try building a bunch of small stores, but they're definitely not going to try to become Wal-Mart.
They want to skate to where the puck is going to be, not to where it is. We can be certain that the Walmart of ten years from now will not be identical to the Walmart of today. Part of that difference will be Walmart's reactions to Amazon's own actions, but mostly it will be changed consumer expectations. Do you enjoy shopping for toiletries and similar consumables?
I'm not so sure. I think the future of consumer durables is showrooms with very little inventory but a huge number of things on display. If you want it right now, you pay full price, but if you want it delivered tomorrow (from your local amazon warehouse) then it's 10% off.
In other words you no longer 'go to the store' because it's economically inefficient to store many units of the same thing on expensive prime real estate. Instead almost all the warehouse space of existing stores is turned into floor space and they only have 1 of each item, although they keep a small stock of consumables.
Amazon has recorded a net loss 4 out of the last 6 quarters. Read into that what you will, but I don't think they're in any position to 'get bored making money'.
Though I agree, it does sound insane. What would they stock? They can't supply everything obviously. I think it will be a good outreach to put a face to the company you're buying from, and make it more personal. I'm sure the employees will have little Kindles so you can quickly order things in stock. And gain the confidence from buyers that are hesitant buying things from online retailers. Potentially this could hurt stores like Best Buy, or the like. If Amazon can provide a better customer service in person, than people will choose them over the other. I'll be curious to see how this plays out for them.
"Though I agree, it does sound insane. What would they stock?"
????
I would expect they are only going to stock amazon stuff.
Maybe amazon branded + amazonbasics.
Why would they stock anything else?
To me, this seems like a fairly obvious play: They have had trouble getting playing with fire branded stuff in their internet and tv-only campaigns.
People actually want to play with the devices.
Given the choice between buying space in best buy among tons of other companies, and leaving it to the whims of blue shirted people to sell their stuff, or doing it themselves, they chose "doing it themselves".
While I agree with you that it would definitely help their sales by selling it themselves vs. the blue shirts. I can't seem to think they will only sell Amazon products. Not to say they will sell substitutes of their products as well, I think it would be a missed opportunity to stock it only with Kindles, and Fire Phones. It would be surprising to me at least, if their main objective with this store front was to increase sales of their products alone. I could envision them being a big box in the future with stores around the US. They've already got a lot of warehouses to back something of that caliber up.
If they get into selling other people's stuff in person, they then have to compete with other people in the area on those prices, deal with support for those devices when they break. They also have to deal with all the attendant supply chain issues, etc.
Supply chain for a warehouse is different than supply chain for the store. If too many people in alabama want something tomorrow that isn't in alabama warehouse, they overnight it from vegas and pay the price. If too many people show up to buy something in the store in alabama, they are simply out of stock. In one case, they make a sale and pay a little more overhead. In the other case, they probably don't make the sale.
Additionally, right now their support is limited to "we click buttons, you repack stuff, and we ask UPS to take stuff back to us". The average brick and mortar store provides a lot more support than that.
They already deal with a lot of this for kindle products, but not other peoples.
For other people's products, I can't see them wanting to get into this business, it's a rathole, and only serves to help others more than them :)
I don't think they will get into the business of selling tvs in a big box, for example, right up until best buy dies.
I think they are perfectly happy with "people try stuff, then buy it on amazon", and i don't see why they wouldn't be.
In short, i have trouble seeing why they would want to be a big box in the future. Their entire business model is based around the idea that being a big box is inefficient.
I guess I am being too optimistic. I really enjoyed reading that response, and you brought to mind a lot of things I just didn't really consider. Supporting other peoples devices would be a hassle, and a huge undertaking who does zero of that currently. Since you've debunked my theories :), rethinking it maybe it's just a great way to advertise, and get people touch, and feel the phone in person with a great salesperson next to them. The article I think said it is suppose to be up before the holiday season. And why run a test store in New York, New York? I wouldn't ever suggest doing a test run in an extremely high end area like that. Maybe it's up for Nov, Dec, Jan.. and than disappears.
It makes sense to me too. I've never owned an Amazon device, or (I think) even touched one. I've heard middling things about them, but holding one in the hand could be enough to persuade me to pick one up.
I don't think they would have too much trouble knowing what to stock, they would just look at their sales. Stock the most popular items, new releases of movies/books/games, and phones, tablets and PC's.
On the other hand, that would make them nearly equivalent to any of the other "brick and mortar" businesses. I wonder if they want to focus on showcasing their own products, like an apple store. They have been pushing the advertising on amazon fire TV and phone a lot.
Apple's flagship Manhattan store famously does quite well as a showcase for their products and helps to sell millions for them. Amazon could be doing that math that for every user we get into the ecosystem we can extract X in lifetime value from book, video and app purchases (again a way it could make sense).
Also, you can consider this maybe Amazon trying to become Walmart faster than Walmart can become Amazon. Having physical stores still counts for much in the retail sector, having one (or a bunch) would potentially give them leverage and more options. They _already_ have a massive nationwide system of warehouses and logistic centers, is it that crazy that they could move products into brick and mortar shops as well as the presumably much more complicated process of people's homes?