Amazon's plans were first reported in the industry blog Good E-Reader and have been covered in numerous news outlets, but the company had not confirmed the reports as of press time.
Amazon has taken small steps into physical-world retailing but this would be the first Amazon-branded store. Last fall, Amazon placed storage lockers in a Seattle 7-Eleven store and in Rite Aid, Gristedes and D'Agostino stores throughout New York City to facilitate buy online/pick up in store services. In addition, Amazon's Quidsi subsidiary operates a beauty salon in the high-end Americana Mall in Manhasset, NY.
The retailer's move comes amid mounting criticism and concern from a number of quarters, including the contention that Amazon is in the business of "hijacking" customers from other retailers. Target spoke for many brick-and-mortar retailers when it sought help from its suppliers to battle "showrooming," where consumers browse for items in their stores but then purchase from lower-cost online retailers such as Amazon.
Amazon's Price Check App is seen as a key facilitator of the profit-draining showrooming trend, particularly after Amazon promoted the app with a one-day 5% discount during the 2011 holiday season.
Others that have Amazon in their sights include brick-and-mortar book retailers, who object to Amazon's dual role as both a publisher and a retailer. Barnes & Noble, Books-A-Million and Indigo have all said they will not stock titles from the retailer's Amazon Publishing division.
According to industry analysts, Amazon's desire to add physical stores to its portfolio may have been prompted by the success of Apple's retail stores. In addition, Amazon may be seeking to provide customers with a place where they can try out the Kindle, as well as other technology devices Amazon develops.
The move is also a sign that Amazon has more than simply lower prices and strong recommendation algorithms up its competitive sleeve. Amazon's competitors will need to pay attention to multiple fronts in order to retain their customers and maintain profitability.
For related content: Stop Amazon from Hijacking Your Customers
Stop Amazon from Hijacking Customers Part 2
Target Seeks Allies in Battle Against 'Showrooming'
Amazon Promotes Price Check App with One-Day 5% Discount
Amazon Tests Lockers in NYC Rite Aids
Amazon Pilots Site-to-Store Pickup in 7-Eleven