It looks as if Amazon, which seemed like it would never set foot outside of the digital world, will open its own brick-and-mortar store later this year.
Multiple news outlets (citing unnamed sources) are reporting that Amazon’s first physical store will open sometime this year in Seattle. According to the reports, the store will be smaller than a traditional big-box chain like a Barnes & Noble, and will mostly feature high-end products and Amazon exclusives.
(MORE: In Latest Moves, Barnes & Noble Is Betting It Can Compete with Amazon)
Rumors circulated a few years ago that Amazon would soon launch its own bricks-and-mortar retail outlet, but for a long time they turned out to be just that — rumors. But this time, it seems the rumors are true. (Amazon was unable to confirm or deny the reports Monday.)
The move may seem strange to some who view Amazon’s model as one not to be messed with. Think about it: Amazon’s online marketplace has become a one-stop shopping staple for millions of online shoppers, all the while gradually chipping business away from traditional stores like Barnes & Noble. And its Kindle and e-book selection have been wildly successful.
(MORE: As Netflix Becomes More Like Pay TV, Pay TV Becomes More Like Netflix)
But Amazon has arguably hit a speed bump of late. Its fourth-quarter sales missed estimates by almost $1 billion, causing shares to drop last week. Net income fell 57% in the fourth quarter, and analysts are predicting that Amazon will have at least two more disappointing quarters. The manufacturing costs of the Kindle Fire seem to have hurt the company’s growth. Another factor in the disappointing numbers is Amazon’s reliance on third-party sellers, which has grown recently as a portion of the company’s total sales.
The initial retail outlet will presumably help Amazon test the potential profitability of expanding into traditional retail. The first store will focus on selling Amazon’s Kindle line of e-readers and accessories like cases, screen protectors and USB adapters, reports Good E-Reader, adding that Amazon plans to open the new store before the end of the year, in time for the holiday shopping season.