5 Reasons Amazon Should Open Brick-And-Mortar Stores
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Amazon is rumored to be opening a retail store in New York City.
The store will be located in the Herald Square neighborhood and will also serve as a mini-warehouse with same-day delivery, the Wall Street Journal reports.
Despite the widespread popularity of online shopping, brick-and-mortar stores are essential to the success of retail companies, according to a recent report by consulting firm AT Kearney.
The report, written by Michael Brown, Mike Moriarty, and Andres Mendoza-Pena, notes that 95% of all retail sales are captured by companies with a traditional retail presence.
Here are a few reasons Amazon should open stores.
<h3>1. Customers could discover more Amazon products. </h3>
"The majority of consumers prefer in-store discovery for key retail categories such as apparel and accessories, health and beauty, and furniture," the analysts write.
While e-commerce is very convenient, shoppers still prefer to see and touch many products before buying.
Having physical stores could help Amazon in its push to become a major fashion retailer. It could also help drive purchases of new products in the health and beauty section.
<h3>2. Shoppers like trying out merchandise. </h3>
Having a brick-and-mortar location can drive sales for products like electronics, according to the report.
Product displays are important for driving sales on products like tablets, televisions, and cell phones.
"Shoppers don't really know the difference between LCD and LED; they choose what looks better to them," the analysts explain. "Immediacy, ease, and accuracy of testing are all cited as reasons for preferring in-store trial.
If Amazon opened a store, it would be able to better-display electronic products like the Fire Phone.
<img src="http://static4.businessinsider.com/image/540dce60ecad04431cdbc956-1200-800/450823892.jpg" border="0" alt="Jeff Bezos Amazon Fire Phone">
<h3>3. Stores beat online for investment purchases.</h3>
<span style="font-size: 15px; line-height: 1.5em;">Customers strongly prefer to buy investment pieces like furniture or jewelry in-person, according to AT Kearney. </span>
<span style="font-size: 15px; line-height: 1.5em;">If the shopper is spending a lot of money, he or she would rather see the product and get input from a sales associate. </span>
<span style="font-size: 15px; line-height: 1.5em;">Consumers also like the immediacy of buying such products in stores. </span>
<span style="font-size: 15px; line-height: 1.5em;">Amazon's stores could be an opportunity to sell more big-ticket items. </span>
<img src="http://static1.businessinsider.com/image/5437fe67ecad04b541e7169d-1002-794/screen-shot-2014-10-10-at-11.39.31-am.png" border="0" alt="chart AT kearney">
<h3>4. In-store pickup is preferred over home delivery. </h3>
<span style="font-size: 15px; line-height: 1.5em;">Many consumers experience anxiety about valuable products being delivered to their homes and feel that in-store pick-up is a safer option, AT Kearney analysts write. </span>
<span style="font-size: 15px; line-height: 1.5em;">Shoppers also like the instant gratification of taking home their new purchase. </span>
Having a physical store could help Amazon sell a wider range of products. It could also help shoppers feel more connected to the brand.
<img src="http://static3.businessinsider.com/image/5437ff826da8115d13181967-1023-760/screen-shot-2014-10-10-at-11.44.23-am.png" border="0" alt="chart physical stores AT Kearney">
<h3>5. Returns are much simpler. </h3>
<span style="font-size: 15px; line-height: 1.5em;">"</span><span style="font-size: 15px; line-height: 1.5em;">This clear preference for in-store returns is a product of the desire for accessibility, </span><span style="font-size: 15px; line-height: 1.5em;">immediacy, and time efficiency, which translates to a behavioral pattern of returning products </span><span style="font-size: 15px; line-height: 1.5em;">to the nearest store," AT Kearney's analysts write. "And this is great news for physical retailers."</span>
<span style="font-size: 15px; line-height: 1.5em;">The ability to return items to a store could also help drives sales at Amazon because shoppers would feel like their purchases were less of a risk. </span>
<b>See Also:</b>
<ul><li>Here's How Teens Really Spend Money, What They Like, And Where They Shop</li><li>The 30 Most Popular Sandwiches In America </li><li>Ikea Just Fixed The Worst Thing About Its Furniture</li></ul>
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