In November last year, Amazon.com AMZN -5.21% opened its first physical bookstore in Seattle’s University Village. After some twenty years of relentless assault on Barnes and Noble, bankrupting Borders, Tower Records, and Circuit City in its wake, the once online pure-play retailer is now forging its “physical extensions,” throwing up brick-and-mortar stores of all sorts.
From dozens of pop-up retail sites to the rumored grocery stores and drive-in curbside locations for pick-up services, Amazon has planned to roll out 20 locations over the next two years, and 2,000 more over a decade. Why would Amazon choose to contaminate its highly efficient, high-growth e-commerce model with traditional, scale-bound retail outlets? Several studies, business academics, and consultants have shown the limits of asset builders.
Author: Howard Yu