Has Google proven it can handle its own retail stores?
This article may contain personal views and opinion from the author.
So, word just came out that Google may be working on opening its own chain of retail stores
in major metropolitan centers by the holiday season this year. In theory, it sounds like an idea with amazing potential
- centralized places where you can go and play with Nexus devices, Chromebooks, and the fabled Google Glass. The trouble is that Google's real-world history with retail makes us skeptical as to whether Google has proven it can handle its own retail stores.
Of course, we're all familiar with the recent troubles that Google has had with keeping the Nexus 4 and Nexus 10 in stock, and all signs point to that issue being caused by Google simply underestimating
either the demand for the products, or underestimating the willingness of customers to purchase hardware sight-unseen from the Play Store. The second reason is more understandable, because Google's history with selling the Nexus One and the Galaxy Nexus directly to consumers may have given the company low estimates in that regard. The first reason would be one that is much more troubling.
The first reason also seems relatively plausible, because beyond the troubles with keeping the Nexus 4 and Nexus 10 in stock, Google has also had quite a bit of trouble keeping the new Samsung Chromebook in stock; and, while we may love Chrome OS, the demand for Chromebooks is nowhere near comparable to the demand for the new Nexus devices.
How fast can Google learn retail?
Patrick Gibson, who helped to build the original iPad, is famous for saying
"Google is getting better at design faster than Apple is getting better at web services." This is true, and it's a big reason why even at the high end, Android is beating iOS. Larry Page has made a concerted effort to build a culture of design in Google, which has started to pervade every product that the company makes. The question is though: how fast can Google get better at retail?
Google is still relatively new to the retail game, and relatively new to the supply chain side of things as well. Google has been a software company for the majority of its existence, and has only sold a couple of devices directly to consumers before the big push this past year with the rebranding of the Android Market into the Google Play Store. The Nexus One was definitely a niche product with very low demand. The Galaxy Nexus was far more successful as sold internationally and through Verizon than it was sold directly from Google. And, we've already talked about the troubles with the new line of Nexus devices and Chromebooks. The only device that Google has had in stock more often than not is the Nexus 7.
Luckily, Google seems to understand that it needs help in this endeavor
, and according to the rumor, Google is only really building the point-of-sale systems in-house, and "most of the ramping up of these stores will be done by an outside agency". And, Google has had experience running the "store-within-a-store" model with Chrome OS sections in Best Buy stores in various locations. Of course, that only covers the actual stores themselves, and doesn't answer the issue of supply chain, and making sure those stores have devices on the shelves. Although, from what we've seen since the Nexus 4 has made it back into the Play Store this last time
, maybe Google has already sorted out that side of things as well.
While we don't want to call it proof that Google has sorted out its supply chain issues, the Nexus devices have been in the Play Store for over 2 weeks straight now without being sold out. That is far better than what we originally saw with the new line of Nexus devices, but it would be more comforting if the Nexus 4 could get more efficient than "shipping in 1 to 3 weeks".
We've seen this before of course. Apple's stores have been successful, but of course, Apple has always been a hardware company. The better analogue is Microsoft, which had always been a software company that had dabbled in hardware. Microsoft opened its first retail store in October 2009 with the launch of Windows 7, and it's been a slow roll for the stores. Of course, until the release of the Surface, Microsoft didn't really have any interesting proprietary hardware to sell. Google may not have that either exactly, at least not until Google Glass is released, but at least the Nexus program has developed some amazing hardware, and there will be the almost-Google made Motorola X Phone.
Google has proven time and again that it is a company that can fix and learn from mistakes very quickly, and it is a company that knows its strengths and when to look for outside help. That's been the core of the Nexus program so far. Google hasn't been a hardware company, so it partnered with various manufacturers to build devices that represented the "Google experience" of Android. This alone gives us confidence that even with "an outside agency" handling the stores, the Google ethos will be represented, which means that as long as there are devices on the shelves, Google Stores should be very nice indeed.