Google and Fellow Tech Giants Move Into Shopping Malls

Google and other leading tech giants – Amazon.com Inc., SAP AG, Intel Corp., Hewlett-Packard Co. and Microsoft Corp. – are opening retail pop-up stores, stores-within-stores, mall kiosks and showrooms, and even outfitting tour buses with their latest gadgets, to ramp up sales during the crucial year-end shopping season. Inspired and challenged by Apple’s successful retail stores, the companies hope to convert tech-skeptical consumers into gadget buyers by letting them swipe, type and tinker with the new technology, experts say.

Not every sale, these companies are learning, can be made online.

“They have to be where the public goes and frequents, and that’s the mall,” said David Johnson, chief executive officer of Strategic Vision, a Georgia-based branding firm. “Your tech geeks are going to order online. But before you’re going to see mass consumption, people are going to want to touch the products.”

As more big tech companies add consumer gadgets to their product lineup and compete with Apple – which has an ever-growing footprint of flourishing stores – they’ll also add more pop-up displays to show off those gadgets, allowing consumers to interact with tech in a personal way, experts say.

“Everyone in retail has looked at Apple in the last few years, to try and replicate what they’ve done,” said Stephen Baker, an analyst with The NPD Group. “If you are dabbling in hardware, you have to be in front of the customer.”

Palo Alto, Calif.-based HP added mini-stores inside two locations of the Nebraska Furniture Mart, and had a pop-up store and restaurant in New Zealand for the 2011 Rugby World Cup. Intel, of Santa Clara, Calif., has opened the Intel Experience Store in Chicago, Los Angeles and New York, showcasing HP detachable laptops that run Intel processors. EBay Inc., the San Jose, Calif.-based e-commerce company that started as an auction website, last month put up large touchscreen panels on the walls at Westfield San Francisco Center. Consumers can shop from three interactive glass screens powered by mobile technology.

HP and SAP, the German software giant, have each taken retail displays on the road – HP is running a truckload of gadgets and demos across the country, making stops in cities that include San Francisco, Palo Alto, Dallas and Chicago. SAP built a bus to showcase its cloud services, mobile technology and data applications. It has since parked the bus at 61 events, including the TechCrunch Disrupt conference in San Francisco and a professional sporting event in Detroit.

“It kind of looks like an Apple store,” said Byron Banks, vice president of product marketing at SAP’s Palo Alto office. “It has iPads on it. It has touchscreens on it.”

SAP doesn’t sell gadgets like Apple, but it does provide the software for more than 250,000 big businesses and agencies, many of which make and sell everyday consumer products such as cosmetics and hardware parts.

“The closer we are to consumers and people on the street, the better able we are to do our job,” Banks said.

Experts say most tech giants won’t open full stores like Cupertino, Calif.-based Apple; retail space is expensive, and unless you have a wide product selection, it would be hard to fill. Periodic installations and pop-up stores give companies the flexibility to move around and avoid hiring full-time retail staff.

“No long-term commitments, no long leases,” said Larry Chiagouris, a consumer behavior and marketing expert at Pace University. “You can be in Palo Alto today and you can be in San Jose tomorrow.”

The purpose of these pop-ups, buses and kiosks is not necessarily to sell the products, but to  introduce consumers to them.

Amazon insisted that its recent Kindle pop-ups at the Westfield San Francisco Center were not stores, although they sold Kindle tablets and accessories from a vending machine.  The pop-ups at a handful of malls – the San Francisco location was taken down the first week of December – were designed to promote the new Kindle Paperwhite e-reader, an Amazon spokeswoman said.