“I give them two years before they’re turning out the lights on a very painful and expensive mistake…”
That’s a quote from a pessimistic analyst in a Bloomberg Op-Ed dated May 20, 2001 — just one day after Apple opened its first retail locations.
The arguments against brick-and-mortar retail are sound, for the most part. It’s an expensive proposition to open a retail location that could quickly become nothing more than a showroom for Amazon.com. And almost everywhere you look, old-school retailers are getting crushed as consumers opt for the convenience of online purchases.
Yet Apple has proven that if you do it right — and if your product line is good enough — retail can thrive, even in the tech space. Twelve years after its first foray into upscale malls in high-rent districts, Apple’s retail juggernaut brought in the sales. Apple makes roughly $6,050 for every square foot of store space. That’s more than twice high-end jeweler Tiffany & Co.’s $3,017 per square foot, according to consulting firm Retail Sails (via Forbes).
But the billion-dollar question goes to Google:
Can the king of search make retail work?
Google topped $800 for the first time today. Over the past five months, it has separated itself from Apple, helping to lead the Nasdaq higher while Apple steadily slipped. Now rumors are swirling that Google is planning to open stand-alone retail locations — possibly as early as the holiday season.
Google stores could be a boon for the company. It’s already proven it can innovate (working prototypes of Project Glass and self-driving cars come to mind). But if Google can demonstrate the worth of its new innovations at retail locations to an endless supply of potential customers, a new period of growth could be in its future.
Don’t bet against them…
Greg Guenthnerfor The Daily Reckoning
Greg Guenthner, CMT, is the editor of the Daily Reckoning’s Rude Awakening. He is also a contributor to Agora Financial’s Trend Playbook, a free resource for trend followers and technical traders. Greg is a member of the Market Technicians Association and holds the Chartered Market Technician designation.
Make Way for the Gold Price "Zero Hour"
After a six month rally, the Nipponese index dropped 7.3%. Is it a turning point or a small correction?
After rising 3% out of the gate after Thursday’s bloodbath, the Japanese index embarked on a wild ride.
The American Association of Petroleum Geologists was nice enough to schedule its 2013 annual convention at my hometown of Pittsburgh…
Given a choice, Bernanke will likely strangle the currency (your money)... in favor of “strengthening” the economy.
If the Maker Movement Is So Great, Where’s Our Flying Car?
IRS scandals and the dangers of dissenting opinion in America.