Amazon to Open Physical Store


By Mike Moriarty, A.T. Kearney

Well, well, well. Amazon is opening a store. Isn’t that nice!

Now, does that make the company an enormous on-line retailer with “a store”, or does it make Amazon a small to mid-sized retailer with an enormous online presence?

It almost doesn’t make any difference — and that in itself makes a difference. Welcome to planet Earth, Amazon!

Americans love to shop, they love physical stores and they love to shop online. But at the end of the day, 90% of purchases are made in a physical store, and — more importantly — 50% of purchases that are made online are made on a website of a retailer with a physical store.

Well, I guess that number just jumped up a little.

And even for those of us who discover, shop and buy online, two-thirds of us still go to a physical store to test and trial, return or something-something-something about our “online purchase”

It’s called omnichannel, and just pulled the plug on all those chicken-littles who have said the sky is falling on physical retail.
It’s no surprise that Amazon is opening stores. Shoppers love stores. We love the place, the discovery, the contact, the people, the convenience, the immediacy. And in a couple of years, we’ll love the history … “You know I shopped at the first store on 34th street in New York!” someone will say in 2064, when Amazon has more stores than [insert your favorite convenience or forecourt store here]

Now, it will be interesting to see what Amazon does with their new stores. If they are just metropolitan logistics points (pick up and return) that would be such a disappointment. It would be such a lost opportunity.

When created themselves, and re-created the way we shop, it was energizing, dramatic and exciting — and it still is. Even for those of us who are solid “feel it, see it, buy it” shoppers, there is no doubt that Amazon (and Alibaba, eBay, Etsy, etc., etc) has changed our lives for the better.

So now what? There are physical retailers that are also enormously successful with their online presence … Macy’s, Sephora. And there are previously only-online retailers who are opening physical stores at an amazing pace — Warby-Parker, Athleta … and now,

Our shopping journeys take us all over the place — online, in store, social media, friends and family, in our car, on our phone; well, what goes around certainly does come around.

And is certainly a goes-around/comes-around kind of company. Tremendously powerful, uniquely innovative. But it can be so much more. Think inclusion, value, and social redesign.

Think about it one more time: Inclusion, value, and social redesign.

Let’s hope that when figure out what they want to do with their physical store spaces, that they continue to thrill us with access, insight and social redesign. Thrill us!

The message is not that is opening a physical store — better not be! — the real message has to be that is moving into a new place, with new ideas, and new solutions.

Mike Moriarty is a partner in the retail practice of A.T. Kearney, a global management consulting firm, and co-author of On Solid Ground, a study that looks at the role physical stores continue to play in the shopping experience. He can be reached at [email protected].

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