Today Google stock is running at around $800, causing speculations to ramp up about the launch of a dedicated storefront. A lot of comparisons to Apple's early days in the store business are being thrown around. While there are many similarities, a storefront may actually make more sense for Google than it does for Apple.
There is no doubt that the store model that Apple has concocted is a massive success. They seem to have done nearly everything right. But can Google do it better, and make their products just that much more valuable? Will their stock therefore break the elusive $1,000 mark?
Unfortunately, I don't have any of those answers. I do however have some reasons why a Google Store makes complete sense.
- Try before you buy.
Give consumers a place to test revolutionary technology before they buy. Google Glass, or just about any product coming out of Google X, is going to be a try before you buy situation. Personally it would take awhile for me to slap down a few hundred (or $1,000 as some analysts are predicting) on some glasses. For some, trying them on would dramatically reduce the length of that purchase funnel.
- Show and sell.
Much of the selling of Google products is left to online videos and high school students working at big box stores. Those stores are also noisy, crowded, competitive, and failing faster than I can write this sentence. A Google Store would allow the company to take over the demonstration and selling process to really "show" the product the way a Googler would do so. Hiring passionate staff has worked for selling Apple products and as more and more Google fanboys are born, this model could become a very powerful selling tool.
- Service, service, and more service.
I could stop there, but this is such an essential aspect. Google offers a massive array of online sales, analytics, and advertising services that the stores could act as a service station for businesses and individuals looking for support. Google's online products are sometimes a massive hassle to work with if you have issues. Try working as a small business needing support for your Google Places account or trying to solve a client's issues on Google Analytics. Forget about getting ahold of someone to help you out. The stores, however, could solve many of these issues by being staffed by online and tech experts ready to solve your every problem. As someone who has worked with many of Googles online products this would be an absolute dream.
Maybe the most obvious point is that dedicated stores would allow Google to bypass paying third party retailers a chunk of the selling price. Not that they need more money at this point, but I'm sure they have something in the works that could use a couple extra million in throw-around cash. A large concern here is that Google runs a lot like Amazon. The products sell at such low margins that retail stores may not be sustainable. However, the stores could be considered a cost of business. You can't tell me that the cost of everything at the massively awesome headquarters in Mountain View can be justified.
- Brand equity.
Google could use a little help in this area. The company is obviously known for their worldwide standard in search engine technology. They are becoming known for their cellphones and mobile operating systems. But as the company brings out more tablets, televisions, set-top boxes and other support products they will need a place to show customers that the Google brand is behind each and every one of these products. Once customers see how much the company has to offer they may be more willing to switch from their current brand of choice and sign on to the Google ecosystem
It seems so simple, but Google has a lot at stake with the store model. I'm sure we'll find out more soon, but what are your thoughts? Will Google test their skill in the retail market or try something else we haven't thought of yet?