Can Amazon Break Into Brick-and-Mortar Retail Via Kindle Devices?

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Amazon.com (NASDAQ:AMZN) is a lot of things, but it’s not a brick-and-mortar retailer, and that’s one thing the company might be slowly trying to change. According to the Wall Street Journal, the e-commerce giant is gearing up to offer small brick-and-mortar retailers the option of using a checkout system that uses Kindle tablets. Sources told the publication that Amazon’s program could be launched as early as this summer; the Seattle-based company has apparently already bought the necessary technology and enlisted the necessary engineers to help ensure that if its program goes through, it will have a timely rollout.

It is still unclear how Amazon intends to market its Kindle tablets to retailers, but people briefed on the company’s plans told the Journal that it may give merchants Kindle devices and credit card readers. These services could also expand to website development and data analysis. Last year, Amazon acquired a San Francisco startup called GoPago Inc., which offers checkout systems linked to a smartphone app, and now there is speculation that the acquisition is about to bear fruit in the brick-and-mortar sphere in the near future.

Wall Street Journal sources maintain that Amazon’s plans could be delayed or even cancelled, but the company’s evident interest in breaking into the realm of physical retail stores is significant: Although Amazon has long run the online retail sphere, its competitors have at least had a physical edge on the company. That is helpful for brick-and-mortar stores in terms of taming the Amazon giant, because 90 percent of commerce is still conducted in physical retail locations. But if Amazon’s plans go through, competitors could no longer have that advantage.

Even if Amazon manages to launch itself into the brick-and-mortar sphere, its success is not guaranteed, as there are already many other companies that offer checkout services both traditional and more technologically advanced. The Journal highlights Verifone Systems (NYSE:PAY) and NCR Corp. (NYSE:NCR) as two such competitors that Amazon definitely encounter, and eBay (NASDAQ:EBAY) also is in the midst of expanding its reach into the electronic payments sphere of the physical world.

Still, if we know anything about Amazon, it’s that the company doesn’t know anything about losing. The e-commerce giant does have some advantages to bring to the electronics payments world. The Journal reports that the company already holds the credit card information for more than 230 million users, and people trust its services. Though Amazon would likely first go after smaller retailers, it could eventually expand its clout to offer its services to larger ones.

At the same time, Amazon has a lot of rivals, and there are not many competitors that might want to partner with a company that is currently sucking the life out of many other retailers. What’s more, merchants might be wary of doing business and especially sharing customer data with Amazon.

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