Source: Google
If you google ‘Google store’, you’ll find one opening in NYC
Google went searching for a new platform to sell its consumer electronics products and found the answer in opening its own store in the Chelsea section of Manhattan.
The online search and technology giant plans to open a permanent location this summer that will sell a wide variety of Google merchandise, including Chromebooks, Fitbit devices, Nest smart home products and Pixelbooks.
Shoppers will be able to browse in the store before making a purchase or buy items online and pick up what they bought at the location.
The store will spotlight the interconnectivity between Google’s products so that consumers can experience how the devices can be used in their daily lives. Google will staff the store with company experts to walk shoppers through its portfolio of products, provide help on installations and make repairs, such as cracks in screens. The store will offer workshops throughout the year to assist users of its products with the know-how to make the most of the devices.
The Chelsea store will be colocated in the same building as Google’s New York office. The company has been in the city for 20 years and sees the store as an extension of the brand and a symbol of its “commitment to the city.”
Google has not indicated if it has plans for further retail space going forward, only that its strategy is to meet with customers to get their feedback as it continues “to explore and experiment with the possibilities of a physical retail space and build upon the experience.”
The company’s early move into physical retailing, not counting pop-ups it has used in the past, is clearly brand centric and comes at a time when the Google Store has failed to gain meaningful traction online as it goes up against Amazon.com and other platform competitors.
The disparity between Amazon and Google is particularly evident when you look at research that points to the former as the primary shopping search destination online, even as the latter holds the lead overall.
Google has offered a variety of perks to make itself more attractive as a marketplace to sellers but its numbers, which measure in the four digits, pale in comparison to Amazon, which hosts millions of vendors whose sales account for more than half its retail dollar sales volume.
Discussion Questions
DISCUSSION QUESTIONS: Do you see physical stores as a viable means for Google to grow its hardware sales in the U.S.? Will having physical locations staffed by Google experts support the tech giant’s online business, as well?
Poll
BrainTrust
DeAnn Campbell
Head of Retail Insights, AAG Consulting Group
Raj B. Shroff
Founder & Principal, PINE
This reminds me of the approach that Dyson took to physical stores, using them as a product showcases with a store experience designed for touching and testing the product in an engaging environment. While I don’t think Best Buy or any other retailer should be worried about Google opening a bunch of stores, it does say something about how compelling the experience is that physical stores offer. It will be interesting to see how the search giant approaches store design over time.
Opening stores will allow Google to showcase its technology and devices better. Of course, these are already available in other retailers but there they jostle for attention among a whole range of products, including Amazon’s products. While I think a store will work well in high-traffic destinations, I wonder how successful the concept would be elsewhere. Amazon’s stores have a wide appeal as they sell other things like books, games, and so forth. If the Google store is just focused on devices then it may fail to pull in casual browsers.
Google can’t get into physical retail fast enough. Never mind the competition, the learning available from the laboratory of physical retail is compelling. I have long used the mantra “Explore + Experiment = Experience” and Google uses those words, in their own way, to talk about opening stores. Figuring out the alchemy of physical stores + digital/e-commerce will be critical for tech giants and retailers alike. At some point it’s all about the learning, for both the retailer and the consumer.
Explore + Experiment = Experience
I like this mantra a lot – I might borrow it, Jeff…
I liked the alliteration. Ex + Ex = Ex²
It is evident that Google is struggling to strategize against Amazon when it comes to retail. Amazon is threatening Google’s search. And Amazon can very well enter into Google’s local search and maps territory more easily than Google can venture into Amazon’s retail value chain.
Not sure what to make of this physical store. It seem to be a one off, half-hearted attempt. In a way this reminds me of Microsoft’s retail attempts. Both Microsoft and Google are tech at heart. They’re good at working on tech innovation, but not so good at dealing with consumers.
Suresh, you bring up a great point about Amazon impinging on Google’s search market. However there seems to be a symbiotic relationship here. When it comes to product search specifically, both companies are driving near 50 percent (of all product searches) and have been for a few years – but in Google’s case, there has been a trend towards more branded goods from brand names while on Amazon’s side it is more generic. See this article. I don’t think Amazon would be able to penetrate maps or YouTube easily as Google has it today – and the differentiation has shown through. In any case, not only would Microsoft and Google have a difficult time with physical stores – but so would Amazon as shown through their many attempts.
The first thing I thought about after reading this was that it is interesting that the two biggest online companies (Google and Amazon) are opening physical stores. That should give some comfort to retailers who may be concerned that the in-store experience is dead. Today’s retailers that have both the physical and online presence seem to be finding the formula that works. Typically it’s a shift from physical to online. For Google, it’s the opposite – a shift from online to physical. It’s too soon to gauge the success of this strategy. A year from now, we’ll know more.
Given Apple’s $10,000 psf numbers at retail, I think you have to try and get some of that. There’s obviously a huge market there and undoubtedly some of it under served. Having said that, ask Microsoft and Samsung how that strategy went. Apple’s first-to-market dominance has been untouchable so far but, IMO, Google’s still doing the right thing. Wonder who their Ron Johnson is?? Check back in a year to find out if they acquired that kind of executional brilliance to push the obvious strategy along.
Anybody I know who has Google hardware is very happy with it. I am still hesitant. What I need is a Google store to go and try and have some expert help me.
Google has been in a dance with brick-and-mortar for years with their pop-up experiments and retailer partnerships. The time is now for Google to take this to the next level, and really have no choice if they want to compete with Amazon and Samsung’s “smart” product network, or avoid Amazon taking over as shoppers’ first choice of product search engine. And if you compare the Google pop-up in NYC a couple of years ago with any Amazon store – including Amazon Go – it’s clear that Google has a better understanding of what shoppers want in a physical experience, so I have high hopes for this store test.
I remember hearing Melissa Gonzales say during a GlobalShop panel that once an online retailer reaches $10 million in sales it needs to open a physical location because it becomes too expensive to attract new customers strictly online. It looks like Google might be at that stage.
Even though you can already purchase Google products in a variety of places, I like the idea of a store where I can try, buy and get advice all in one place. I also like that I can buy them in a store full of associates who are specifically trained to sell them. I hope a Google store comes to my local mall.
Yes I can get a Google product at Best Buy, but as good as the Best Buy team is they just don’t know the product deep enough.
That’s the exact reason I miss Microsoft stores.
I think it’s a viable idea but I hope they bring some Google personality to it and do something different, the way Apple stores first came to market.
I assume they looked at doing a larger investment in Best Buy, similar to what Microsoft does with its own stores-within-a-store and well-trained associates. By enhancing that, they would immediately be in Best Buy’s almost 900+ stores. Seems that would lead to more incremental sales and provide broader exposure to shoppers, many of whom wouldn’t actively seek Google products but would be open to them. Right now they only have a few disparate endcaps and a single nice display or two in Best Buy.
I love what Jeff Sward said in this thread about learning and since they have the money to burn, why not give own-retail a whirl and see what insights they can gain. But I’d still like to see what a bigger or smarter investment in Best Buy (or Target) would look like for them to drive broader, and perhaps more cost efficient, awareness.
Thanks Raj!
For Google, hardware sales need a distribution point – whether through partners or self-driven, the brand will carry product value in either case. The option of owned physical stores brings cost and management issues with a trade off of marketing and presence. This is a marketing question for Google and not an operational one. For a $162 billion businesses primed to sell ads, this would be like a Home Depot putting a 2×4 foot sign in its parking lot advertising a new screwdriver brand.
Google clearly realize that stores are a must if they are to increase their ecosystem reach. It also sends a strong signal to traditional retailers that you need to have both a physical and a digital presence. It also provides an opportunity to use a store as a distribution hub.
In terms of direct comparisons with Amazon on the device front, this will however highlight deficiencies – Google’s physical device program feels like it lags behind that of Amazon. Take security products for example – the options available in Google’s Nest line are significantly more narrow in scope than that of Amazon’s Ring products. The same is true in terms of physical Alexa devices compared to Google Hub devices.
I see this as more of a learning experience than purely chasing incremental hardware and device sales through one flagship store location. Google has struggled with retail and supporting retailers as compared to Amazon’s ecosystem. I am not sure this is the start of an Apple Store-like strategy, even with Google experts staffing the store, but it can certainly help Google better understand retail and retailers in general.
That said, Google needs a showcase to demonstrate the benefits of smart home technologies to grow its user base, and a store footprint is the best way to do that.
Smart move of Google to have a NYC Flagship store to promote its brand and products while establishing an in-person direct connect with consumers!
Google has a stellar set of products that are great at integrating multiple aspects of our lives — home (Google Home, Nest, Chromecast, Wifi, Doorbell, lock camera) and health (Fitbit). Once people get hooked onto the interconnected experience (like me), they will have multiple routes to product discovery. That is why I believe, it makes total sense for Google to set up experiential stores to show customers the value of their connected products.
Google needs to explore physical stores to see what they can learn. Time will tell if this is successful a la Apple or more like some of the others who tried this and didn’t do so well. I do think higher traffic areas will be important, but it also depends on the product mix. Can’t wait to see more on this!