Amazon, born and raised on the Web to eventually become the world's largest e-tailer, is apparently planning to begin stacking its products on real, not just virtual, shelves.
The company reportedly is preparing to open its first storefront— on 34th Street near Macy's, the Empire State Building and Herald Square in New York City—just in time for the holidays.
This is according to non-publicly identified sources cited Oct. 9 by The Wall Street Journal. Amazon itself isn't confirming or denying the story.
If this store does take shape, not only will Seattle-based Amazon be competing directly with Macy's, Target, Walmart and all the other usual-suspect merchants, but also a score of other IT-based companies with brick-and-mortar stores that include Apple, Samsung, Sony and its Pacific Northwest neighbor, Microsoft.
Will Serve as a 'Mini-Warehouse' for Same-Day Deliveries
In its report, the Journal said the Manhattan Amazon store location would serve as a "mini-warehouse" for same-day delivery in New York, product returns and pickups of online orders.
Amazon, which has built its own branded line of IT products—such as Kindle Fire tablet PCs and e-readers, a new Fire smartphone and Fire TV, a television set-top box that connects to home networks—would, for the first time, be able to put its own creations physically in front of people with a retail store, in addition to promoting its same-day delivery option. The same-day service is now available in 12 cities, which includes Los Angeles, Atlanta and Phoenix, in addition to New York City.
Why would an online mega-success like Amazon think it has to get down in the retail trenches with all those other competitors? For one thing, few third-party retailers—Walmart and Best Buy are among them—carry Kindle tablets and e-readers.
"Some of the products they need people to see," industry analyst Rob Enderle of the Enderle Group, told eWEEK. "The new Kindles, the new phone—they've got to build some kind of buzz on them. It's awfully hard to motivate a Best Buy to shelve Amazon products well.
"Also at a high-traffic site like New York, you can bring people in and show them the same-day delivery stuff that you carry. People will get the hang of shopping, then going home and having the stuff waiting for them."
Potential Customers Can Get Their Hands on the Products
This will compete directly with the trend to which more and more buyers are subscribing: going to a retail store, actually handling the new phones and tablets, and then going back home or to the office and ordering the same items for lower prices online.
Amazon's pricing for most of its home-developed products is already pretty attractive. For example, the Fire phone was originally priced at $199 when it launched in July, but it has since been marked down to $1 with a two-year telecom contract. The set-top box is priced at $100, and the Kindles range from $100 to $190.
"You can think of this as a 'customer acquisition mechanism' to get people excited about some of the products and excited about Amazon," Enderle said. "For people who wait until the last minute to shop, this is a way to get people into the store and actually get something to walk home with."
Having a retail store offering buy-and-carry goods and same-day delivery could prove to be a welcome option for the huge number of tourists in the nation's largest city.
The address for the store, according to the Journal, will be 7 West 34th Street, across from the Empire State Building and a block east from Herald Square, where the Macy's flagship store is located.