NEW YORK CITY—Demonstrating that online retail and bricks-and-mortar stores can peacefully co-exist, Amazon.com plans to open its first physical store across from the Empire State Building, according to the Wall Street Journal. The two-decade old retail site will launch its in-person brand at 7 W. 34th St.—putting it on the same bustling street as Macy's—just in time for the holiday-shopping season.
In a report obtained by GlobeSt.com, Paul Morgan, research analyst at MLV & Co., says the move, if repeated in other cities, would make Amazon a master of omni-channel selling and it would verify the value of the retail sector.
“While details were not published regarding the lease-term and the strategy (same-day pick-up vs. retail-orientation, for example), should Amazon view the branding and same-day convenience benefits
of retail stores significant enough to roll out more in the future, the omni-channel retail spectrum would essentially be complete,” he says. This would “assuage investors concerns about long-run shopping center demand and reemphasize the centrality and stability of bricks-and-mortar retail and retail REIT portfolios.”
Opening a physical location is “about marketing the Amazon brand,” Matt Nemer, a Wells Fargo analyst, tells the Journal. “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.”
The Midtown space will 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 Journal notes. The new store primarily will be a place for customers to pick up orders they've made online, but it also is expected to one day serve as a distribution center for couriers and will likely one day feature Amazon devices.
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.
Vornado CFO Stephen Theriot praised the 34th street building on a recent webcast. “As a former department store, its got very high ceilings and its got big, open floor plates,” he said. “That's the type of property that a lot of the creative class tenants [seek out.]”
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
