Amazon to Build its First-Ever Physical Store in New York
NEW YORK - The retail game is in for a massive shake-up this holiday season as Amazon.com opens its first-ever brick-and-mortar store in New York. Incidentally, AmazonFresh, the company’s online grocery subsidiary, is reportedly expanding the service in New York City – its first move to the East Coast. Coincidence? Perhaps, but it begs the question: Will we soon see fresh produce line the aisles at Amazon’s physical store?
Amazon has been tight-lipped on the new site so far in terms of size, length of the lease, or its selection and amount of inventory. From the few details we can gather, the physical store will be located at 7 West 34th Street, across the Empire State Building in midtown Manhattan, and according to Wall Street Journal, the store would “function as a mini warehouse, with limited inventory for same-day delivery within New York, product returns and exchanges, and pickups of online orders.” Couriers can also use the site as a distribution center with two loading docks located at the back of the building.
It seems like an odd move, but this isn’t the first time Amazon has thought about traditional retailing. About two years ago, the company scouted locations in Seattle before nixing the idea, citing poor foot traffic, the Journal said. That won’t be a problem on Manhattan’s 34th Street.
“Foot traffic on 34th Street is unparalleled,” Chase Wells, Executive Vice President at SCG Retail, a real-estate-service company, told the Journal. According to the 34th Street Partnership, the Empire State Building drew 4.3 million visitors to its observatory last year, while Macy’s flagship store at Herald Square, Amazon’s new neighbor, attracted 20 million shoppers.
Tim Bajarin, an analyst with Creative Strategies, told USA Today that this holiday experiment can give Amazon “the kind of feedback it needs to see if it wants to expand,” especially with that kind of traffic.
Meanwhile, analyst Ken Perkins of Retail Metrics Inc. told Los Angeles Times that Amazon’s new physical store “certainly means more pressure and more competition for other retailers, particularly big-box retailers.”
AmazonFresh has already been making waves in online grocery retail. If AmazonFresh looks to accommodate its produce selection in a new home, I wouldn’t be too surprised to see the company using the store as a physical location to sell produce to shoppers in the real world. It’s certainly an exciting prospect, but it also brings in another big-name competitor into the retail mix.
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