Good E-Reader reports today that Amazon plans to launch a retail store in its hometown of Seattle "within the next few months." It will be a small boutique emphasizing its Kindle e-readers and physical copies of its Amazon Exclusives book titles. It will also stock accessories for Kindles, such as cases, screen protectors and USB chargers.
It's not a new rumor (it dates as far back as 2009), and it would be a departure from Amazon's strategy thus far. In December, LAUNCH reported the retail store rumor, adding that Amazon plans to sell its own branded merchandise. Amazon is better known for threatening real-world retail than for promoting it. But Amazon's moves in the past few months make the strategy seem more sensible.
The $199 Kindle Fire is an important service for Amazon's digital content, but it needs to be in physical hands first. That's why Amazon cut deals to put the Kindle family in over 16,000 partner stores over the holidays.
Amazon's key competitor, Barnes & Noble, already has hundreds of its own stores, and they have their own showroom for the Nook readers and tablets, so the boutique model reported by Good E-Reader sounds reasonable.
Did the retail boost work for Amazon? Who knows? As usual, Amazon did not disclose how many Kindles it sold last quarter with any kind of specificity. Amazon typically spins statistics that sound good, but it won't provide hard numbers about devices.
Devices are not Amazon's core business; content is. Kindles are sold at a loss, and Amazon makes the money back on books, movies, apps and other media. The Kindle is a delivery mechanism, and putting the devices in stores would give customers a chance to try out the interface.
Amazon has avoided sales taxes by remaining a purely online retailer, giving its customers the incentive of the lowest price. But lately, sales taxes on online purchases have started to seem inevitable, as Amazon's deal with the state of California shows. Once Amazon resigns itself to sales taxes, that's one fewer reason not to bring its retail might into physical stores.