The planned site of Amazon’s store, on 34th Street in New York, is set to open in time for the holidays.
Keith Bedford for The Wall Street Journal
Amazon.com Inc.
AMZN -1.26%
plans to open a store in the middle of New York City, according
to people familiar with the plans, the first brick-and-mortar outlet in
its 20-year history and an experiment to provide the type of
face-to-face experience found at traditional retailers.
The site, set to open in time for the holiday-shopping season on the same busy street as
Macy’s Inc.
M +0.50%
’s flagship store, would mark an attempt by Amazon to connect with
customers in the physical world. Amazon has built its business on
competitive pricing and fast shipping. Until now, though, it couldn’t
compete with the immediacy of a traditional store.
Amazon’s
space at 7 West 34th St., across from the Empire State Building in
Midtown, 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. The Manhattan location is meant primarily to
be a place for customers to pick up orders they’ve made online, but will
also serve as a distribution center for couriers and likely one day
will feature Amazon devices like Kindle e-readers, Fire smartphones and Fire TV set-top boxes, according to people familiar with the company’s thinking.
Opening
a physical location is “about marketing the Amazon brand,” said
Matt Nemer,
a Wells Fargo analyst. “Same-day delivery, ordering online and
picking up in store are ideas that are really catching on. Amazon needs
to be at the center of that.”
Operating
stores also carries risks. Until now, Amazon largely has avoided some
costs associated with retailing, including leases, paying employees and
managing inventory in hundreds of stores. Those expenses could imperil
the company’s already thin profit
Amazon’s first store, set to open in Manhattan, will
mark an experiment to connect with customers in the real world. Dan
Gallagher discusses on the News Hub. Photo: AP.
Some details about the New York site
couldn’t be learned immediately, including the size, length of the lease
or amount of inventory that would be housed there. People familiar with
the matter cautioned that Amazon’s plans could change, and that the
store is an experiment and could be deemed unsuccessful.
If
it is successful, however, the New York location could presage a
rollout to other U.S. cities, according to the people familiar with the
company’s thinking.
Amazon has studied
opening a brick-and-mortar outlet for years, even scouting locations in
its hometown of Seattle about two years ago before scrapping the idea
because of insufficient foot traffic, said another person familiar with
the effort. Amazon once sold Kindles in
Wal-Mart Stores Inc.
WMT +0.55%
and
Target Corp.
TGT -1.64%
outlets, but those retailers pulled the devices from shelves two
years ago in an apparent nod to Amazon’s growing power in retailing.The 12-story building on 34th Street, owned by Vornado Realty Trust,
once housed an Ohrbach’s department store and now has Mango and Express
stores
at street level. There are two loading docks at the back of the building.
The
Amazon store will be in the shadow of the Empire State Building, which
last year attracted 4.3 million visitors to its observatory. It is a
block east of Herald Square, where Macy’s flagship store draws more than
20 million annual visitors, according to the 34th Street Partnership, a
business-improvement district.
“Foot
traffic on 34th Street is unparalleled,” said Chase Welles, executive
vice president at SCG Retail, a real-estate-service company.
The streetscape of 34th Street has changed
dramatically since the 1990s, when it was populated by low-end
retailers. Since then, the business-improvement district and area
companies have spent about $2 billion on upgrades to the neighborhood
and individual properties, according to the 34th Street Partnership.
Global and national retailers such as Zara, Uniqlo and Vince Camuto have
opened stores on the street
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