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Report: Amazon to open retail store in NYC

Jefferson Graham
USA TODAY
According to the report, Amazon's Manhattan location would function as a "mini-warehouse" for same-day delivery in New York, product returns and pickups of online orders.

LOS ANGELES — Could this be Amazon's Miracle on 34th Street?

Online retail giant Amazon will take on Macy's and other Herald Square retailers with a physical store of its own for the holidays in New York, according to a Wall Street Journal report citing people familiar with the plans.

The Manhattan location would function as a "mini-warehouse" for same-day delivery in New York, product returns and pickups of online orders, according to the report.

Amazon has shaken up the retail world by offering lower prices than many brick-and-mortar stores and offering comparison app tools that brought forth the trend of "showroom buying" — folks going to a physical store to see the item, then going home and ordering it online to save money.

The E-tailer, now with a line of its own tech products — several Kindle e-readers and tablets, a TV set-top box and new smartphone — would be able to put its homegrown goods in front of more eyeballs and tout its growing offering of same-day delivery. That service is available in 12 cities, including New York, Los Angeles, Atlanta and Phoenix.

Richard Doherty, an analyst with the Envisioneering Group, says New York attracts many foreign tourists who shop on Amazon back home, but find many products only sold here.

A retail store offering same-day delivery could be "a tremendous uptick for tourists" and generate "tremendous volume," Doherty says.

Amazon declined to comment, with spokeswoman Kelly Cheeseman adding, "We have made no announcements about a location in Manhattan."

Amazon would be expected to devote much of the floor space to its Kindle e-readers and tablets, which have sold well, as well as the underperforming Fire set-top box and Fire smartphone. The Fire phone started at $199 in July, but was marked down to $1 (with a two-year contract) just two months later.

Tim Bajarin, an analyst with Creative Strategies, sees this as an experiment for Amazon to get its products in front of consumers. Only a handful of retailers sell Kindles, including Best Buy and Wal-Mart.

"There's still a segment of the population that's touchy-feely," says Bajarin. "They want to see the product up close, and have it shown to them."

By opening in New York during the holidays, Amazon "gets high traffic, and the kind of feedback it needs to see if it wants to expand."

Rob Enderle, an analyst with the Enderle Group, says Amazon wouldn't just stock its own products. "Even the Apple Store carries non-Apple products," he says. "They'll showcase Amazon, but also show off the breadth of Amazon's catalog."

According to the Journal, the address for the store is 7 West 34th Street, across from the Empire State Building and a block east from busy Herald Square, home to the flagship Macy's, and site of the classic 1947 Christmas movie Miracle on 34th Street, about a Santa Claus put on trial for believing that he is indeed Kris Kringle.

Follow Jefferson Graham on Twitter.

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