Google is close to signing a lease for some 14,000 square feet in Chicago's former meat-packing district for a two-level permanent retail store, the Chicago Tribune reported, citing unnamed sources. Google declined to comment to the paper, according to the report.
The move would mark the tech giant's first brick-and-mortar flagship, and follows other tech companies, including Apple and Amazon, that have used physical stores as a platform for selling their products and expanding their reach.
The building is near Google's Fulton Market Midwest headquarters, which has contributed to revitalization of the area and also seen recent expansion, according to the Tribune. But "a Google flagship is likely to elevate Fulton Market's stature as a retail destination," according to Tribune reporter Ryan Ori.
Google has staged retail pop-ups in major cities, especially at holiday time, but not more permanent locations, in contrast to its rivals. Apple, of course, has a formidable global brick-and-mortar footprint, including an avant-garde new store in Chicago, while Amazon, through its bookstores and Amazon Go, along with its acquisition of Whole Foods and partnerships with Kohl's and Best Buy, is delving ever deeper into brick and mortar.
Google has some of the same reasons to explore physical retail as Amazon does. Its broadening array of devices, including its Google Home voice assistant-powered gadget, other smart home systems, headsets, smartphones and tablets and more make store-based sales imperative. The ability to personally check out products is highest among the reasons consumers choose to shop in stores versus online, and that's especially true for electronics and apparel, according to last year's Retail Dive Consumer Survey and other research — including from Google itself.
While Google seems like the epitome of the online world, its entry into major physical retail was inevitable, according to David Weiss, a partner at retail consultancy McMillanDoolittle.
"With Amazon's increasing physical presence — its expanding fleet of bookstores, mall kiosks and Amazon Go stores — it is all part of the gravitational pull," he said in a blog post Thursday. "The bookstores and kiosks have contributed to Alexa's early dominance in voice activated devices. Amazon understands how important it is for the consumer to still touch, feel and understand what they are buying. Especially in behavior-altering devices like Alexa and Google Home."
Google's move, especially if it signals a wider brick-and-mortar push, could further blunt Amazon's device sales. Google's 5.4 million second quarter smart speaker shipments outpaced Amazon's 4.1 million shipments, retaining the number one spot for the second straight quarter, according to a report Thursday from global technology market analyst firm Canalys.