Thursday, January 22, 2015

Amazon Is Not Opening A Store In New York, but Why The Information of Their Real Estate Investment in NYC Matters

There has been a lot of expectations about Amazon opening some stores in a near futures. Indeed, brick & mortar companies are investing more and more online, seeking for this new Internet market to deliver growth, whereas it seems that owning a strong store (or at least delivery places) network will be a key strategy for e merchants.
The press has found that Amazon has bought some real estate in New York City, which was thought to be about opening its first store.  Amazon has since responded to that article, by saying they indeed bought some real estate, but not to open a store, but  they sublease the building’s retail space to others.

That still gives a lot of food for thought. That means Amazon may set some partnerships with some retailers in order to boost its business. There may be several options:
  • Retail start ups with cutting edge concept that may benefit from Amazon's supply chain, Internet potential.
  • Some concrete retailers like Walmart or Target that may work with Amazon to set up some partnerships to develop some business together (as Walmart did in its category management with some big suppliers)
  • Or to have some warehouse capabilities in order to develop fast delivery service, maybe with the Amazon fresh concept. Indeed, nowadays warehouses are big places near highways far from the towns, but maybe Amazon could try to have smaller places, closer to customers, that may lower the transportation cost.
This is the reason why I believe this news may soon unveil some new interesting concepts from Amazon.

Now does that mean Amazon will never open some stores, it is still too soon to tell. But I am sure that Amazon will also find some innovative way to create a network allowing its customers to click & collect their products.