As 90 percent of all U.S. commerce occurs in brick-and-mortar shops, Amazon, the largest online retailer, is trying to nudge its way into the physical shopping world. The project, sources told the Journal, would supply brick-and-mortar shops with a point-of-sale system composed of Kindle tablets equipped with credit-card readers. Amazon also is planning to offer retailers other services, such as data analysis and website development, WSJ reports.
Amazon's move puts some retailers in an odd position: They will have to decide whether it's worthwhile to partner with a company that competes with them for sales, as well as to share their customer data. To sweeten the deal, Amazon may advertise the stores' sales, promotions, and discounts on Amazon.com and its daily deals site, Amazon Local, WSJ reports.
"At the end of the day, a merchant wants to make a sale, to drive up business. And if Amazon or anyone else can help them do that, that's tough to turn away," Richard Crone, chief executive of payments advisory firm Crone Consulting, told WSJ.
Amazon is going to focus on offering its payment services to small businesses because large retailers may not want to give up their data or pay to overhaul their checkout systems. The bet on in-store checkout systems places the company in competition with startups like mobile credit-card reader Square, as well as established industry players like NCR and VeriFone Systems.
"The game of mobile payments is going to be won or lost at the physical checkout, that's where nearly all of commerce is done today," Crone said.
What do you think? Would your brick-and-mortar pay Amazon to equip your store with Kindles? Let us know in the comments section below.
WILL YAKOWICZ is a reporter at Inc. magazine. He has covered business, crime, and politics at Patch.com, and his work has been published in Tablet Magazine and The Brooklyn Paper. He lives in Brooklyn, New York. @WillYakowicz