Amazon Goes Old School; First Retail Store Expected in NYC - Analyst Blog

As reported by The Wall Street Journal, Inc ( AMZN ) - whose phenomenal retail journey has spelt debacles for many brick-and-mortar retail chains - may soon open its first physical store at a prime location in Midtown Manhattan, NYC. It is however unclear whether the store, which is rumored to be opening ahead of the holiday season, is a permanent venture or just a holiday pop up.

The Rationale behind the Move

Amazon's decision to foray into the brick-and-mortar retail space offers testimony to the importance that consumers attach to the touch-and-feel experience while buying things.

Amazon is not the first to have realized this. JustFab Inc. and SwimSpot, the once digital-only California-based retailers, have also opened offline stores.

Two years ago, there were speculations that Amazon was looking for a brick-and-mortar store space in Seattle. The online giant has metal lockers set up around the country in places like 7-Eleven stores to help people conveniently pick up packages.

The planned store will likely contain a selection of inventory to enable local same-day delivery and facilitate shoppers who want to physically pick up products purchased online.

Amazon may also consider using the space as a showroom for its tech-gadgets, like Kindle e-readers and Fire smartphones.

According to reports, depending on the success of this maiden venture, the company will consider opening stores in other cities as well.

Looking Ahead

This move could prove to be an important one for Amazon, given that till now it has capitalized solely on its online business model, which saved it the cost of setting up and maintaining physical chains.

Moreover, the holiday season is of great importance to Amazon. So the decision to open a physical store, along with the expansion of seller holiday deals on its website, looks promising in the current circumstances.

Amazon currently holds a Zacks Rank #4 (Sell).

Stocks that Warrant a Look

Better-ranked stocks in this industry include Mercadolibre, Inc. ( MELI ), World Energy Solutions, Inc. ( XWES ) and PetMed Express, Inc. ( PETS ). While Mercadolibre and World Energy Solutions sport a Zacks Rank #1 (Strong Buy), PetMed Express carries a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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