Amazon (NASDAQ:AMZN) plans to move into the retail market

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By Thomas Copeland on October 18, 2014 Company

Amazon (NASDAQ:AMZN), the dominating force in the e-commerce world is eyeing to conquer the retail world as it plans to set up a brick and mortar store right starting operations this holiday season. The shop will be set in New York City and for starters Amazon (NASDAQ:AMZN) will initiate kiosks in San Francisco and San Jose from next week.

It’s being reported that Amazon (NASDAQ:AMZN) has been highly influenced by the rising trend of the physical retail when it comes to the smartphone market. Amazon (NASDAQ:AMZN) believes that physical retail will give it more power and more experience, translating into more sales. Physical sites will also be used as distribution centers, speeding up the delivery process.

Amazon (NASDAQ:AMZN) has been a dominant internet brand, but perhaps it wants a physical reputation among the customers. A more human or say tangible brand can make a better and stronger impact than a presence on the internet. Amazon (NASDAQ:AMZN) is looking to create an emotional bond which big physical brands have with their customers.

Amazon (NASDAQ:AMZN) has a reputation for providing products at lower prices as compared to its rivals. But the move into retail won’t be without perils. First of all the brick and mortar is a specialty retail which depends upon qualified and skilled merchants and designers who are masters of their craft. Amazon (NASDAQ:AMZN) has the name, the inventory but it doesn’t have the necessary experience to swiftly operate specialty retail.

The low prices might not be possible for Amazon (NASDAQ:AMZN) initially when it comes to retail, especially specialty retail. The reason is because of high labor and real estate costs. Amazon (NASDAQ:AMZN) might be able to offset that by providing amazing shopping experience. But that might not be enough to fend off losses and subsequent angry investors. Amazon (NASDAQ:AMZN) proclaims it has ‘Earth’s Biggest Selection’; however, when it comes down to brick and mortar, Amazon (NASDAQ:AMZN) will have to narrow down their selection in order to focus.

Amazon (NASDAQ:AMZN) prides itself on the shopping ease and convenience it provides consumers. Physical retail is a different ballgame altogether and Amazon (NASDAQ:AMZN) might find it difficult to employ their previous tactics and strategies in the retail market. Amazon (NASDAQ:AMZN) knows better than anyone that physical retail is harder than internet retail. Many factors come into play such as weather, geo political situations etc.

However, a seasoned market player like Amazon (NASDAQ:AMZN) who has spent the last decade ruling the internet market wouldn’t find hurdles too hard to beat. Here’s hoping that Amazon (NASDAQ:AMZN) cuts through the retail market and become as big as its e-commerce experience. For now, time will tell how Amazon (NASDAQ:AMZN) deals with the dynamics of the physical retail market. Will they be able to withstand the hot winds of the highly competitive and old school retail world?

One thing is for sure, Amazon (NASDAQ:AMZN) will have a great advantage and control over expressing its brand personality if it moves into the physical world.