Saturday, February 23, 2013

Google retail store plans and visions

Rumors - market signals - visions

Credit: Google Glass
Rumors, speculations and predictions about new products or strategic actions of leading companies is a highly entertaining form of communication in social media, sometimes swapping over till business media. Especially rumors about listed companies like Apple, Microsoft and Google have a large audience of fans, analysts and investors. Often started by professional news hunters, former journalists and bloggers, who claim to have well placed "sources" within a company, rumors can be false, deliberately false aimed to spread disinformation, speculation only, or first signs of a emerging change. For professional business analysts rumors are part of the information flow that have to be handled with open minded but critical care following core principles of evaluating information sources.
The latest example is the rumor about Google´s plan to open retail stores. It was started Februari 18 by  "rumor blogger" Seth Weintraub, a former Global IT director and journalist, now editor at " 9to5Google, who refers to "an extremely reliable source" confirming that "Google is in the process of building stand-alone retail stores in the U.S. and hopes to have the first flagship Google Stores open for the holidays in major metropolitan areas." The "news" was published by WSJ referring to 9to5Google and fueled social media to create new blogposts, comments, and #googlestore retweets. February 18, WSJ, confirmed that "Google Works on Plan for Retail Stores", referring to "people familiar with the matter." It was also claimed that Google is "studying Apple Inc.'s playbook for building a consumer-electronics brand."
Professional analysts started immediately searching around the globe of other signs of evidence. Analysts at investment banker Morgan Stanley reports various Google job postings seek engineers to “Develop, test, and deploy Retail Point of Sale systems” (POS), requiring skills such as “Experience spanning any of the top tier platforms including: IBM, NCR, Retalix”, various retail POS systems.

The MS analysts envision Google retail stores as an opportunity for Google to create a new "try before you buy" channel for current and future gadgets such as Google Glass. Google has recently started to invite app developers to become Glass Explores and to pre-order a Glass Explorer Edition for $1500 plus tax and attend a special pick-up experience, in person, in New York, San Francisco or Los Angles. The first version of the new eyewear, known as the Explorer Edition, is expected to be on sale by the end of 2014. For a glimpse of eyewear apps check out the new promotion video.

Google retail experiments

Credit: Searchengineland
The fact, that Google opened Chrome Zone retail outlets in London in 2011 hosted within existing Dixons Retail outlets PC World and Currys, has been mentioned as sign that Google has identified the need of physical retail channels  to generate more hardware revenues.  The UK stores sell Chromebooks, netbooks that run the Chrome OS, as well as their accessories. In a statement released by the Google UK Head of Consumer Marketing Arvind Desikan, it was revealed that the London and Essex stores were only the first installments of "mini-shops" to be spread out internationally in the coming years.

The Google hardware portfolio 

Credit: Google Nexus
A driving force behind the retail store idea is the increased hardware portfolio, that Google has developed as platforms for its Android operating systems. The Google Nexus is a line of mobile devices using the Android operating system produced by Google in conjunction with original equipment manufacturer (OEM) partners like HTC, Samsung and LG. Google has sold Android-powered smartphones and tablets through its website since 2011. 
In June 2012 Google unveiled the Nexus 7 tablet computer developed with Asus and in October 2012 the Nexus 10 tablet manufactured by Samsung, was revealed. 
Credit: Google, Chromebook
Google Chrome OS is a Linux-based operating system designed to work exclusively with web applications. It was announced in July 7, 2009 and made an open source project, called Chromium OS, in November 2009. The first Chromebooks for sale, by Acer and Samsung, were announced in May 2011 and began shipping on 15 June 2011 through online channels, including Amazon and Best Buy in the U.S., and in some European countries. In addition to laptop models, a desktop version, called a Chromebox, was introduced in May 2012. In early 2013 Lenovo, Hewlett Packard and Google itself entered the market.

Motorola Mobility

Credit: Motorola Mobility
Google´s hardware portfolio expanded with the acquisition of Motorola Mobility, which builds smartphones and tablets. Google generate about 10% of it's revenues from the Motorola business through two segments. The Mobile segment designs, manufactures, sells and services wireless mobile devices, with integrated software and accessory products. The Home segment designs, manufactures, sells, installs and services set-top boxes for digital and Internet protocol (IP) video, satellite and terrestrial broadcast networks, and Internet protocol television (IPTV) distribution systems, broadband access network infrastructure platforms, and associated software solutions to cable TV and telecommunication service providers. According to a GIGAOM May 2012 report referring Goldman Sachs the Motorola deal was critical for Google to battle both Apple’s iPad as well as Amazon’s Kindle Android based Fire tablet. The report says that Google gains no benefit from the Fire, however, as Amazon has created its own browser and curates an app store specific to the device. And although Google is the default search engine on the top-selling iPad, it actually pays Apple for that privilege, which offsets Google’s revenue from ads on Apple’s tablet. With the Motorola mobile platform, Chrome OS and Android  Google should have a strong concept to compete against Apple and Microsoft platforms in the near future. But to attract consumers for its own Chrome OS and Android based hardware, Google will need to invest in its own retail store chain.

Google retail concepts 

Credit: Google indoor map
As leading search engine Google has a unique insight i global retail trends, consumer behavior, purchasing patterns, ad revenues and emerging multi-channel retail concepts. Supporting global retail with new marketing and sales services to strengthen competitiveness is Google's core business idea. Location based services and indoor navigation are promising new growth markets. In November 2011, Google announced a retail program for inside product tracking—with initial trials from Home Depot, Macy’s, Bloomingdale’s, IKE, Japan’s Mitsukoshi plus the Mall of America. The Google program, initially limited to Android phones, works by getting detailed floor plans from the retailer. Once the system detects the consumer has entered that address, it defaults to that map and then uses in-store tracking to show the customer’s location compared with product aisles. The Google Maps Floorplan Marker allows users (i.e., business owners) to provide feedback about how accurate the Google Indoor Location service is for their venue. The app guides the user where to go inside the venue and do some WiFi scanning (and even Cell ID sniffing). This process collects the necessary data that Google needs to improve its indoor location service. Google is hoping these business users will help Google calibrate the Z-level (floor level) positioning challenge.

  Google parcel pickup station

Credit: Google BufferBox
In November 2012 Google acquired BufferBox, a Canadian startup company from the University of Waterloo, Ontario, offering users a temporary parcel pickup station for packages ordered online. The acquisition is seen as a step to compete with Amazon's Locker service. In December 2012, Google’s Head of Shopping, Sameer Samat, said in an interview with AllThingsD the company has no plans on being a retailer. Google is only helping other retailers to become more competitive.

Google retail store Dublin

Credit: Camenzind Evolution Ltd, Google HQ Dublin
In Februari 2012 Blomberg reported about Google plans to open a retail store at its European headquarters in Dublin's Montevetro office block. Based on the plans, it appears Google is considering opening a store that would span about 1,300 square feet. The plans were approved by the Dublin City Council on January 23. The Google Store would be open to the public and sell unspecified Google merchandise, Google's Irish unit said in a local planning application. Located in the Montevetro office block on Dublin's Barrow Street, the store would have about 123 square meters (1,323 square feet) of space, including an added mezzanine floor designed to draw attention from passersby. Google's Dublin office is its largest location outside of the U.S., according to the filing. It purchased the Montevetro site in April for about 100 million euros from Real Estate Opportunities Plc.

Google studying Apple Inc. 

In the February 18, WSJ article it is said that Google is also "studying Apple Inc.'s playbook for building a consumer-electronics brand." Well, that´s no surprise, who in retail isn´t studying Apple´s  success story. Apple Store is one important component of the Apple playbook. The Apple Store is a chain of retail stores owned and operated by Apple Inc. The first two Apple Stores opened on May 19 2001 in Tysons Corner and the same day in Glendale, California at Glendale Galleria. As of August 2012, Apple had approximately 395 stores worldwide, with global sales of US$16 billion in merchandise in 2011, and they lead the United States retail market in terms of sales per unit area. According to CEO Tim Cook Apple retail stores generate average annual revenue in excess of $50m. Apple spent $865 million building up retail stores last fiscal year, and expects to spend another $850 million in fiscal 2013 to open between 30 and 35 new stores.  Check out the video with Steve Jobs explaining the store concept of the first ever Apple Retail Store in Tysons Corner, VA. 

Google Store Vision

Credit: Camenzind, Google Tel Aviv
Assume Google will open retail stores in the world, what would they look like? Who would  they partner with to build a "consumer-electronics brand"?
One source of inspiration could be their own office environment, conceptualized and designed by Camenzind Evolution Ltd, a leading workplace innovators. The company has created and built some of the most innovative office spaces globally in recent years. For Google their have designed offices in Dublin, Stockholm, Zürich, Moscow and recently in Tel Aviv.  Based on the Google office design principles Google retail stores could become  innovative and inspiring shopping place where customers can experience Google culture, products and services. Imagine to enter a Google Store
  • "were the design cultivates an energized and inspiring shopping environment that is relaxed but focused, and buzzing with activities. 
  • that "emphasises the importance of the individual customer and maintaining a small-company ambience throughout company growth". 
  • that "offers strong visual and more aesthetically enjoyable and entertaining qualities to stimulate creativity, innovation and collaboration."
  • that "provides a great choice of distinctive emotional and visual experiences and activities." 
Let´s hope Google can use it´s resources and power to empower people all over the world.  

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