For starters, 90% of purchases are still made in physical retail locations. Retail stores have worked well for Apple; Tim Cook says, on average, each generates more than $50 million in annual revenue.
Apple Stores only cost one-fifth of that to set up, and Google will likely spend even less to get its locations up and running. Of course, labour costs are the real expense, and historically Google has preferred automation to human labour, so they’d have to get over that cultural impulse. But Apple has shown that building out stores is a pretty good use of the cash pile it keeps accumulating.
In addition to the revenue opportunity, analysts think Google stores could lift the brand’s public perception. The company has very little interaction with the public; it’s only physically existed in pop-up stores or stores within stores. Google never even ran a commercial until 2009.
Now that it’s making hardware like Android devices, Google Glass, and self-driving cars, it’s smart to create a place where customers can interact with the latest innovations hands-on.
If Google can increase consumer trust, it could have a positive effect on all Google products, including Google+, Google Wallet and more.
That said, Microsoft has tried building out retail stores and it hasn’t improved its market-share situation. But Android is already popular with consumers and Google is a globally familiar brand.
What Google has been missing is the opportunity for consumers to touch and feel gadgets before they buy them. That seems even more the case with tablets, an area where Google really needs to play catch-up with Apple.
Retail stores could give Google the image boost it needs to really compete with Apple.