The opening of an Amazon retail store is a story that won’t go away, which makes me conclude that it is only a matter of time before Amazon becomes a high-street stalwart. The latest rumour reported this week by Bloomberg, is that Amazon is in talks to buy failing electronic retailer RadioShack’s 4,000 stores. Both organisations are yet to comment on the story.
Showcase Amazon products
The speculated plan is that Amazon will use these retail stores for two main purposes.
Firstly, Amazon retail stores would showcase Amazon products such as the very successful Kindle e-reader and the less successful Fire smartphone (poor sales of the Fire smartphone contributed to a $170m loss in Q3, 2014).
Secondly, the stores would act as a delivery point for online orders and offer the opportunity for consumers to order online and have the item delivered to the Amazon retail store. This click and collect method has proved highly popular with John Lewis customers, overtaking home delivery orders.
Amazon would be following in the steps of Apple, which first opened a retail store in Virginia way back in May 2001 (yeah, that long ago) and now stores in major cities all around the world.
Profits at last for Bezos
Jeff Bezos has built Amazon into the one of the biggest retailers in the world, but not one of the most profitable. Investors frustrated at the lack of profits will have been pleased with the recent Amazon announcement of a rare profit for the three months preceding December 31 2014.
The Seattle-based ecommerce giant, reported annual sales of $89bn (£59bn) and a net profit of $214m (£142m) for the last three months of 2013.
However, this was a decrease of $25m compared to 2014. As a result, shares rose by 8% in after-hours trading.
Amazon sets up on U.S. college campus
This week, Amazon opened up shop on a college campus in Purdue. The location is staffed by Amazon employees and offers a drop-off and pick-up location as well as an opportunity for growth in the educational textbook market.
Through the web portal, purdue.amazon.com, students can find and buy textbooks they need for classes. Students are then notified via email or text when the book has been delivered to the campus store.
Competitively priced
The college gets a percentage of revenue for providing the location, Amazon increase sales and brand awareness and students get competitively priced products delivered to a convenient location.
With a business model that benefits all three stakeholders, it will come as no surprise that Amazon plans to open a second store on campus this Spring and could expand into other locations.
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