As e-commerce has gathered speed, brick-and-mortar retailers have started offering customers in-store pickup for things they order on the Web. Now, it looks like Amazon may be jumping on that bandwagon in reverse, according to a report from the Wall Street Journal.
The Seattle-based online retail giant is reportedly planning a physical store in Midtown Manhattan on 34th St., across the street from the Empire State Building. The store — in a 12-story building once home o an Ohrbach’s department store — will serve as a pick-up location for people to grab their Amazon packages, as well as a distribution center for same-day delivery of a limited selection of items.
Customers would also be able to return or exchange items directly at the store, and Amazon may also choose to use it as a showroom for some of its new products, like its updated Kindle and Kindle Fire lineup and its Fire smartphone. Giving users the opportunity to go hands-on with those products (especially the phone) could boost their sales during the holidays.
Playing in the physical world is nothing new for the company, which has already launched automated vending machines for its Kindle e-readers and Kindle Fire tablets. Amazon also offers delivery to lockers in cities around the world, for people who don’t want to have their package delivered to their home.
Still, Amazon has stayed away from a brick-and-mortar play in the past: CFO Tom Szkutak said on a conference call in 2012 that physical retail sales were “not really a driver of our business.”
It’s entirely possible that the company’s plans could change in the future – this store would be an experiment for Amazon – but if it turns out well, the company may choose to roll similar stores out to other cities around the U.S.
Opening a physical location in Manhattan makes sense, especially as the holiday shopping season nears. Amazon had problems with shipping companies not delivering packages on time because of the massive volume of items they have to move around the country. Allowing users to pick items up directly from the company would let Amazon sidestep some of the problems with delivery.
Rumors circulated two years ago that Amazon.com planned a push into physical retail, but those plans never really materialized. Now, as retailers like Target and Walmart expand their online operations, Amazon may want to make sure it pushes onto their turf.
As The Wall Street Journal notes, a physical retail expansion could “imperil” Amazon’s already thin margins, given that the company would need to employ staff, secure leases and manage inventory. The size of the store and length of the lease were not known, though the WSJ said that the company could expand the concept if it proves successful in New York City.
One thing that will be interesting to watch is whether Amazon staffs the store with workers, as its past brick-and-mortar offerings have largely centered around highly-automated retail kiosks. Former Amazon.com employee Nadia Shouraboura is working on a new retail startup by the name of Hointer, which uses highly-automated systems to deliver products to people in stores. If Amazon were to expand aggressively into physical retail, we could see the company following a similar path — reducing costs and attempting to redefine how we shop in the physical world.
What do you think: should Amazon make a move to physical retail? Let us know in the comments.
