Does anyone remember Gateway Computer from the 1980’s and 90’s? Gateway was a disruptive retailer that originally sold computers remotely by mail order on their way to becoming the largest direct seller of PCs in the country. As they grew quickly, competitive pressures brought them to the point of first opening stores and then selling through retail channels. Why would they do that? As it turns out, there are reasons to have a physical presence, like being close to your customer.
UPS is another example. They started in a Seattle basement in 1907- and we all know they deliver and ship packages with speed through warehouse distribution centers to destinations around the world. Why would they need a retail store in a strip mall? Turns out for some of the same reasons as Gateway, getting closer to customers.
How about the fact that Amazon is now opening stores? Amazon is famous for pressuring the bricks and mortar retail industry and has put many traditional retail stores out of business within the categories from which they compete. They are a warehouse distribution company.
So, does it make sense for Amazon to open branded stores? It seems from their perspective, the answer is yes, for some of the same reasons as Gateway and UPS! In fact, an argument for the $13.1 billion acquisition of Whole Foods in 2017 was that Amazon needed the physical presence to fuel their growth in food retail!
Does it make sense for a warehouse distribution company to open branded stores? Is this the merging of e-commerce with bricks and mortar?
Enjoy the article and let me know what you think!
~ Brian Kasal- The Leadership Matrix
Click here- Amazon Plans to Open Large Retail Locations Akin to Department Stores
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