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Is Google Inc. Thinking of Opening Retail Stores?

By Daniel Sparks – Mar 13, 2014 at 11:00AM

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One Apple store on Greene Street New York City may soon be accompanied by a nearby Google store.

Google is scouting New York City real estate for a Google retail store, according to a report from The Wall Street Journal.

A block away from Apple (AAPL -0.91%), on New York City's Greene Street, sits Tiffany, Louis Vuitton, and -- possibly in the future -- Google (GOOGL -1.48%). According to Crain's New York Business, the company is considering opening a Google-branded 8,000 square foot retail store at 131 Greene Street, a property currently listed in Ascot Properties NYC's online property portfolio. Is Google planning on taking a swing at the wildly successful Apple retail model?

Google's search for retail space in New York
While Ascot did tell The Wall Street Journal yesterday that Crain's report is "absolutely false," the Journal notes that Greene Street's appeal to high-end shops and shoppers would make it an auspicious location for the company. Greene St or not, Google appears to be out on a real estate scout.

The Journal's Rolfe Winkler and Keiko Morris explain:

Google has been shopping for space in SoHo for some time, said Faith Hope Consolo, chairwoman of the retail group at New York's Douglas Elliman Real Estate. "They've been talking to everybody," Consolo said. Last fall, she said a Google scout investigated a different retail space on Greene Street that she was representing.

Though Google's product offering is far more limited than Apple's, the company does have a few gadgets it could display: the Nexus line of smartphones and tablets, its Chromebooks, the Chromecast (which remains a best-seller in Amazon's electronics category), Google Glass, and a smartwatch later this year.

Learning from Apple
If Google could capture just a sliver of Apple's success in retail the move would likely be beneficial for the company. Apple retail stores are the world's most successful retail stores, raking in about $50 million in annual revenue per store, trumping Tiffany and Lululemon Athletica.

Beyond sales, Apple stores have intangible benefits, too. The storefront serves as a way to showcase the Apple brand and educate consumers. Apple CEO Tim Cook called Apple stores the "face of Apple," at the 2013 Goldman Sachs Technology and Internet Conference.

While Google won't be earning Apple-like revenue if it decides to open its own stores, it could be a smart move for the company as it expands its product portfolio. The intangible benefits to the brand in high-traffic areas like Greene St. could have meaningful long-term benefits for the company.

Google has already developed some retail experience by posting employees in some Best Buy stores and a few others. The company also experimented with temporary stores called "Winter Wonderlabs" in six U.S. cities last winter. But could Google successfully launch a full-fledged Apple-like retail store?

Daniel Sparks owns shares of Apple. The Motley Fool recommends Apple, Google, and Lululemon Athletica. The Motley Fool owns shares of Apple and Google. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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