Rumors about Amazon.com opening stores have been around for years. Now, according to The Wall Street Journal, the rumors will become reality when the e-commerce giant opens its first store (if you don't count subsidiaries) on one of the busiest streets in the U.S. — 34th Street in New York City.
The store, which will be located across from the Empire State Building, will be used as a place for customers to pick up orders and to make returns or exchanges. It will also serve as distribution center for couriers making same-day deliveries in Manhattan. Many things are not known about the store, including how much if any inventory will be on display, the size of the space, the length of the store lease, etc.
As the Journal and others point out, Amazon opening stores provides both opportunity and risk for the company.
On the opportunity front, an Amazon store provides the opportunity to compete with brick and mortar retailers that are promoting click and pick services to capture sales.
"There's a growing realization that you can't force customers to shop in just one way," Chris Donnelly, global managing director of retail strategy at Accenture, told The New York Times. "We're in a world where the retailer can no longer dictate the shopping experience."
On the downside, one of Amazon's advantages versus physical store competitors has been its relative lack of overhead — operating stores costs money. If the company were to add stores and the staff needed to run them, costs could increase, putting increased pressure on profit margins and eroding the price advantage held over many competitors.
Amazon has not made any announcement on plans for a store.