There were many, not so long ago, who thought that Amazon was going to kill the brick-and-mortar store concept by its ability to offer a huge array of products, easily purchased, and shipped to a user's door. But now, Amazon seems to be embracing that which many thought it would ultimately destroy, as new reports suggest Amazon is planning to open up a brick-and-mortar outlet of its own.
The reports put Amazon's planned location on Manhattan’s 34th Street, well known because of the popular Christmas movie on that same location. Set to open before the holiday shopping season begins at 7 West 34th Street—just across from the Empire State Building—the store itself is intended to function as a kind of “mini-warehouse,” which not only offers up the ability to pick up online orders, but also make returns and exchanges as needed, as well as offer up limited inventory for same-day delivery operations.
There's also a suggestion that there may be some room involved to call attention to Amazon-specific products, like the Kindle line and both the Fire smartphone and Fire TV systems. The whole thing revolves around a plan to focus on “...marketing the Amazon brand,” according to Wells Fargo analyst Matt Nemer. It's also a potential means for Amazon to address the one great problem that it's had ever since its inception: issues of immediacy.
While Amazon offers a dizzying array of products, none of these—aside from the streaming video—can be had the same evening in which they are purchased. Only physical stores can offer that level of immediacy, and that's a point where Amazon has simply been unable to compete. Of course, physical stores require a certain amount of risk in the form of increased overhead—property leases, upkeep, utilities, employees and the like—but if Amazon can address this last weakness, it may be the start of something particularly big for Amazon. Amazon wouldn't be alone in an operation like this, however, as other online retailers like Bonobos, Warby Parker and Birchbox have recently made the jump to a physical storefront to augment online selling.
It's a point that may or may not work out, and it's easy to see both sides of the issue. While as noted previously, it's a great move for Amazon to address its last weakness in terms of current operations, it's going to be taking on a lot of added expense for a less-than-clear return. Indeed, the fact that it's setting this operation to run during holiday shopping season when most everyone is out looking for a Christmas, Hanukkah or Kwanzaa gift kind of skews the numbers to the good. This period is a walking anomaly for retailers; it's called “Black Friday” for a reason, after all, as it's the Friday in which stores can break out the “black ink” denoting a profit has been made on the year. This may not be the best time to run such a test, unless it goes on beyond the holiday season.
Only time will really tell just how well this does, but there's a certain amount of sense to it, especially when other things like Amazon Prime Air are included. Imagine what it would be like for Amazon to have a place for its delivery drones to land and drop off products to be picked up later. It's certainly got possibilities, and it will be exciting to see how it works out.
Contributing TechZone360 Writer
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