Executive Briefings

Amazon Latest E-tailer to Decide a Physical Store Isn't Such a Bad Idea

Amazon reportedly will open a brick-and-mortar shop in Midtown Manhattan in time for the holiday shopping season and that it will be a place for customers to return products, make exchanges or pick up their online orders.

The development, first reported in the Wall Street Journal, says it is possible the outpost will also act as a showroom for flagship Amazon products such as the Kindle or Fire smartphone.

If Amazon opens the site, it would be one of the most vivid examples yet that retailers are intensely focused on building what's known as an "omnichannel" strategy, one that relies on both brick-and-mortar and digital presences that are seamlessly integrated.

E-commerce-only retailers have plenty of cost advantages over brick-and-mortar ones, namely that they are able to maintain lower overhead and a smaller labor force. And yet in the past two years, e-commerce darlings such as Bonobos, Rent The Runway, Birchbox and BaubleBar have pushed to hawk their goods and promote their brands in physical shops. These moves, the retailers have said, acknowledge that for all of e-commerce's convenience and power, the physical store may still offer customers a unique and important value proposition. For some items, it seems, consumers still want to touch them or try them out before committing to a purchase.

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The development, first reported in the Wall Street Journal, says it is possible the outpost will also act as a showroom for flagship Amazon products such as the Kindle or Fire smartphone.

If Amazon opens the site, it would be one of the most vivid examples yet that retailers are intensely focused on building what's known as an "omnichannel" strategy, one that relies on both brick-and-mortar and digital presences that are seamlessly integrated.

E-commerce-only retailers have plenty of cost advantages over brick-and-mortar ones, namely that they are able to maintain lower overhead and a smaller labor force. And yet in the past two years, e-commerce darlings such as Bonobos, Rent The Runway, Birchbox and BaubleBar have pushed to hawk their goods and promote their brands in physical shops. These moves, the retailers have said, acknowledge that for all of e-commerce's convenience and power, the physical store may still offer customers a unique and important value proposition. For some items, it seems, consumers still want to touch them or try them out before committing to a purchase.

Read Full Article