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Business & Entrepreneurship - Society & Culture

Amazon.com, Coming to a Shopping Mall Near You?

November 5, 2014

shopping

For almost twenty years now, Amazon.com has existed in its own little (well, kind of big actually) corner of the Internet. But the big online retailer apparently wants some face time with its customers in an effort to sell more of its electronic devices like the Kindle Fire, which has seen a significant dip in sales.

An article in the Sacramento Bee recently reported that Amazon is now opening “pop-up” holiday kiosks in the San Francisco area in an attempt to get the company’s products into the hands of the consumer.

Marketing professor Rajneesh SuriDrexelNow reached out to Rajneesh Suri, PhD, a marketing professor in the LeBow College of Business and an expert in pricing and consumer behavior, to see if Philadelphia might be the next city to see this kind of action.

Is Philadelphia likely to see the Amazon kiosks like those popping up in the San Francisco area?

Kiosks are likely to assume an important role for an online retailer like Amazon that has little brick-and-mortar presence. With an entry into fast-changing technological products (e.g. the Fire for phones and tablets), it is important that Amazon not only get to market quickly but also provide a superior service (think Genius Bars at Apple stores).

Furthermore, getting consumer feedback for market research assumes an important role to help improve technical products and software. This feedback for technological products, which changes rather quickly, is especially important for Amazon, as it faces intense competition from the likes of Apple, Samsung and Google. The kiosks/stores may serve all these functions very well.

If you base the probability of these kiosks on sales in a region, New York is a more likely candidate than Philadelphia.

Do you see a trend in e-commerce businesses opening brick-and-mortar stores?

This depends on the nature of products. For firms not dependent upon technical products to sustain growth, or for those that sell books and wares that do not change that often, expansion into brick-and-mortar stores might not reap great benefits. Plus, the retailer will be encumbered with operating costs.

These kiosks seem to be an attempt to make up for poor recent sales, but do you believe there are other reasons as well?

Essentially, kiosks are needed to flourish in technical sales (to provide display, service and to obtain feedback) and also provide a pickup point for merchandise. The latter benefit could reduce delivery cost, provided Amazon can “muscle” through their agreements with delivery firms.

Is it a benefit to the consumer to have the opportunity to physically try out Amazon's line of devices?

Yes. This is an important benefit. It allows an online retailer to provide cutting-edge displays (unlike the unmanned product displays at retailers like Target). Using dedicated staff to answer consumer questions might be even more helpful when consumers are not savvy or are on the fence about the electronic product.

Do you think these pop-up kiosks will eventually be permanent fixtures in shopping malls, rather than just appearing seasonally?

Such kiosks will be important during holiday seasons for quick sales and returns, soliciting consumer feedback and for marketing regional promos/product bundles. If the operating costs are not exorbitant and justify the increase in sales, these kiosks are a cheaper brick-and-mortar option for an online retailer like Amazon.

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