Coming soon to a shopping mall near you: Amazon.com.
After nearly two decades of relying almost exclusively on e-commerce, Amazon said Wednesday it will soon open temporary holiday kiosks at the Westfield Galleria at Roseville and a San Francisco mall.
The big Internet retailer said the kiosks will give shoppers a better opportunity to try out and purchase Kindle e-readers and other Amazon electronic devices. Industry experts said the kiosks are the latest example of Amazon’s attempt to get closer to consumers and become an even more powerful presence in retailing. Amazon is reportedly planning to open a permanent store in Manhattan as well.
The “pop-up kiosks” will open for the holidays at the Galleria and the Westfield San Francisco Centre in downtown San Francisco. Both shopping centers are owned by Australian mall giant Westfield Corp.
Amazon spokeswoman Kinley Pearsall said by email that the kiosks will emphasize Kindles and other devices, including the new Fire TV and Fire phone, “and a bunch of new features and services.”
“While customers can already see our products online and at retailers like Best Buy and Staples, we wanted to provide another option to try out our full lineup leading into the holidays,” she added. Pearsall said Amazon experimented with kiosks at a few locations around the country last year, too.
She said devices and accessories will be available for purchase at the kiosks.
The San Francisco kiosk will open next week and the Roseville site will open soon afterward, she said. The exact location in the Roseville mall hasn’t been finalized.
The two kiosks are opening as Amazon tries to recover from several quarters of disappointing financial results; the company lost $18 million in the first six months of this year, compared with a profit of $75 million a year earlier.
As part of its recovery effort, analysts said Amazon is putting greater emphasis on selling its own line of electronic devices, such as Kindles.
“They’re in a battle with companies where you can go and touch these things,” said Scot Wingo of ChannelAdvisor, an e-commerce advisory firm based in North Carolina. “Think of the AT&T stores, Verizon, Apple.” Wingo said Amazon has enjoyed considerable success with Kindles, but its other products haven’t fared as well.
Sally Hamilton, a management professor at Drexel University’s graduate business school in Sacramento, said the holidays are the perfect time to get customers interested in Kindles and other devices.
“Grab the holiday traffic,” she said. “That’s the time when people buy electronics.”
She said the Roseville and San Francisco malls serve plenty of upscale customers coveted by Amazon. “Both of those locations make sense,” she said.
The Wall Street Journal recently reported that the online retailer wants to open a store in Manhattan. The Journal reported that the outlet would function as a small warehouse, with limited inventory for nearby same-day delivery, product returns and pickups of online orders.
A brick-and-mortar store was the last thing Amazon would have considered just a few years ago. The company operated with as few warehouses as possible because it wanted to limit, for tax purposes, the number of physical locations it had.
Physical locations gave states the authority they needed to require Amazon to charge their residents sales tax. Avoiding sales-tax collection helped give Amazon a big cost advantage over brick-and-mortar competitors.
That began changing a few years ago. Amazon wanted to shrink delivery times. That meant it had to build a lot more distribution centers, even if it meant collecting sales tax. Ending a lengthy feud with state officials, Amazon began collecting sales tax in California in 2012 and has opened warehouses in Tracy, Patterson, San Bernardino and Moreno Valley.
The explosion of warehouses has enabled Amazon to reduce delivery times to two days or less in much of the country. Same-day delivery is available in 13 cities, including San Francisco and Los Angeles.
Opening brick-and-mortar stores, even temporarily, brings Amazon even closer to consumers. The company is “just trying to lure you into their family,” said Garrick Brown, a retail analyst with Cassidy Turley commercial real estate in Sacramento.
Brown said several online retailers have begun opening physical locations. For instance, Warby Parker, a maker of luxury eyeglasses that once sold its wares exclusively on the Internet, has opened stores in 10 cities.
“You’re going to see more of these Internet stores pop up (in physical locations),” Brown said.
Brown said Amazon will likely use the Roseville and San Francisco kiosks to sign up customers for Amazon Prime, a $99-a-year membership program. Amazon Prime members get two-day shipping, streaming videos and other services.
“Their big goal is to get them into the Amazon system and sell them Amazon Prime and different services,” Brown said.
The Roseville mall, the largest in the Sacramento region, has previously served as a laboratory for retailers. Last November, Google Inc. opened a holiday store inside the Galleria to let customers test out Google tablets and other devices. It was one of six Google stores around the country.
Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.