Better late than never. At least, that’s what Google Inc (NASDAQ:GOOG)‘s probably thinking if the rumors about a move into retail are true. According to a “reliable source” at 9to5Google, Google is planning to open its own retail outlets by year-end. Though not entirely unfamiliar with retail — Google Inc (NASDAQ:GOOG) has hundreds of existing store-within-a-store setups in assorted Best Buy Co., Inc. (NYSE:BBY) — developing its own stores from the ground up is another beast altogether.
Google Inc (NASDAQ:GOOG)’s rumored move into retail isn’t surprising, really, considering the steps its competitors are taking to put their stamp on the market. Apple Inc. (NASDAQ:AAPL) is the tech industry’s poster child for retail success.
According to research firm Retail Sails, Apple stores led the entire industry in sales per square feet, generating more than twice that of its nearest competitor, Tiffany & Co. (NYSE:TIF). According to Apple CEO Tim Cook, the average store generated more than $50 million in revenue, and at $6,050 in sales per square foot, that sounds about right. But as Cook said, “Others have found out [retail’s] not so easy to replicate.”
It’s tough, but retail’s a must-have
Apple’s lofty numbers makes retail an enticing alternative for IT companies, and Google Inc (NASDAQ:GOOG) is just the latest tech behemoth with an (apparent) interest in retail. Earlier this month, Microsoft Corporation (NASDAQ:MSFT) shared its plans to plow full steam ahead into opening new stores. It will open 11 additional retail outlets by year’s end, five more than it originally announced in December.
Additional ways to generate revenue are usually a good idea, and retail could end up being a goldmine for Google. But there’s more to Google’s retail aspirations than sales numbers: A physical presence gives customers the chance to play before they pay, which is becoming a necessity as the number of phones, tablets, and software alternatives continues to expand.
You’ll never find Apple fans waiting to buy a Nexus, nor will you see Windows 8 aficionados toting around an iPhone, but the lines are blurring for the millions of other consumers without an allegiance. For many, the cost benefit of a slightly better screen resolution or faster processor speed versus saving hundreds of dollars simply isn’t there. And with more options constantly being introduced, consumers need the chance to test the new devices and systems, which is why Google Inc (NASDAQ:GOOG) retail would make so much sense.
What a Google store might look like
There’s no word on possible sites for Google’s rumored shops, but there’s no shortage of possibilities for the stores themselves. Google, as much as any tech leader, is on the cutting edge of developing innovative technologies. Rather than a new iteration of the same thing (iPhone17, anyone?), or a new, “world altering” OS (Windows 13?), Google is working on products like self-driving cars and “smart” glasses. According to the 9to5Google report, Google’s retail discussions began with its decision to offer the latter technology, Google Glass, to consumers. With a price tag of between $500 and $1,000, not to mention the novelty of the Glass concept, customers will need to play with it before plunking down that kind of money.
Google’s not the first tech titan mentioned in the same breath as retail, nor will it be the last. Making a Google retail experience unique would be key, much like Apple’s done. Imagine wandering over to the prototype of Google’s self-driving car, or getting snapshots taken by a hovering mini-drone, all while sporting interactive Glasses.
A Google store could be fun for consumers, but it’ll be serious business for management should it come to pass. Showcasing new products and innovations, generating opportunities to differentiate itself from a slew of rivals, and staying at the forefront of the ever-changing tech industry all point to Google retail stores on the horizon. Hopefully for Google shareholders, the rumors turn out be true.
The article Is It Google’s Turn to Try Retail? originally appeared on Fool.com and is written by Tim Brugger.
Fool contributor Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends Apple and Google and owns shares of Apple, Google, and Microsoft.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
