Amazon opens store in NYC

The Announcement of The First Amazon Retail Store Signals 3 Stark Realities for Amazon 

The Wall Street Journal reported last week that Amazon (nasdaq: AMZN)  plans to open their first retail store in mid-town Manhattan at 7 West 34th right across the street from the Empire State Building.  Over 4 million visitors a year pass by this spot – – good for Amazon’s first foray into Bricks and Morter.  For Amazon, the store opening is a nod of approval to the retail reality faced by all online retailers and a path to eventual profitability.

Reality Check #1: Retail Shopping Is Not Going Away Anytime Soon

According to eMarketer in an April 2014 Study,  by 2017 in-store retail will account for almost $5 Billion of sales compared to just $450 million of eCommerce shopping.  If Amazon wants to grow they must open retail stores:


US Retail Sales by Channel

Reality Check #2: Amazon’s Broad Product Selection Requires Brick-and-Morter Stores

Much of Amazon’s growth comes from carrying the broadest possible selection of merchandise across virtually all product categories.   According to a recent study by AT Kearney  in-store retail shopping remains strong across many product categories.

AT Kerney

Reality Check #3: Physical Stores Where Customers Can Get Help Will Increase Sales

Brick and mortar retail executives universally understand this reality.   A recent Survey of Retail Executives by TimeTrade, found that senior retail executives agree the number 1 thing missing from many retailers and a #1 competitive focus.  The executives also agreed that providing this kind of service will give them a real advantage in getting customers to spend money with them.   So if Amazon wants to compete, stores are going to be the most competitive way to do this.   The same study found sales on average will increase between 50 and 75% will some personalized service:

timeTrade Survey Results

timeTrade Survey Results

Is Amazon on the right Track ?

Yes, definitely.  Over the next 5 years Amazon has to grow FASTER than eCommerce online retailing will let them.  All the indications from consumer buying habits are that brick-and-morter store locations  is the only way to do this.


About Gary

Gary Ambrosino is CEO of TimeTrade,  a leading SaaS company that creates satisfying customer experiences for people that visit retail stores.     Click here to learn more about TimeTrade’s enterprise retail SaaS platform products.