Amazon's opening of a new physical store will come just in time for the upcoming holiday season. However, the move doesn't mean that the online retailer is shifting from e-commerce to brick-and-mortar retailing.
The company will use the store as a warehouse and storefront, albeit in an experimental stage, where customers can pick up their online purchases in the evening. Customers can also visit the store when making returns and exchanges.
At this point, Amazon has yet to confirm details about the store. Amazon spokesperson Kelly Cheeseman stated that the company has not made any announcements on the Manhattan location.
Several speculations have been made about how Amazon intends to use the upcoming physical store. Most of them are based on certain considerations, such as location, existing competition, marketing prospects, consumer demands and the company's future plans.
Having a store across the Empire State Building is a good decision if Amazon wants to take advantage of the heavy foot traffic in the area. It would, however, look awkward if the store only served as a warehouse.
Amazon's biggest competitors -- Walmart, Costco and Kroger -- have a much bigger physical presence than Amazon. Customers would normally turn to their services for the delivery of "need-it-now" products such as food, drink and other household items.
While Amazon already has the same-day delivery service, it has avoided promising delivery speeds; delivery sometimes takes two days at the soonest. Though the company has been erecting million-square-foot warehouses, it builds them in exurban locations where land is cheap.
The advantage of the Manhattan location is its high-profile address; it is a popular destination of a diverse set of shoppers. It is also the perfect location to market one's products. Having a huge Amazon sign placed along one of the nation's busiest streets is one of the best marketing strategies that the company could map out as it showcases its own products, such as the Kindle or Fire Phone.
It has been rumored for years that Amazon would build a full-fledged physical retail place. Perhaps the store in Manhattan is just one step to achieve this. The company has also launched a tool that would identify products as well as a card-reader for buying them. Using all these would, of course, require physical interaction.
It remains to be seen how Amazon plans to use the rumored store. Once it goes into full-swing, there's no doubt that it will usher in a new line of competition against its huge brick-and-mortar competitors.
