• by Thom Forbes  @tforbes, October 10, 2014

Amazon will open its first retail outlet across from the Empire State Building — and a block east of Macy’s fabled flagship at Herald Square — in time for the holiday shopping season, The Wall Street Journal’s Greg Bensinger and Keiko Morris report. 

It will initially “function as a mini warehouse, with limited inventory for same-day delivery within New York, product returns and exchanges, and pickups of online orders,” Bensinger and Morris write. It “will also serve as a distribution center for couriers and likely one day will feature Amazon devices like Kindle e-readers, Fire smartphones and Fire TV set-top boxes, according to people familiar with the company’s thinking.”

Amazon is not commenting on any brick-and-mortar plans it may have to a slew of reporters following up on the story, with a spokeswoman stating, “We have made no announcements about a location in Manhattan.”

The New York Times’ David Streitfeld and Charles V Bagli report that while sources indicate Amazon is indeed “taking over [the] entire building,” — once the site of an Orbach’s department store — “whether there will be an Amazon store any time soon on 34th Street seems an open question.”

They point out that the two retailers currently occupying the ground-level storefront space in the building — Mango and Express — have new leases and the Mango store manager tells them “I’ve never heard of Amazon coming here.” 

But analysts are offering their reactions to the prospect of a 12-story-high Amazon at 7 W. 34^th St. nonetheless.

“Opening a physical location is ‘about marketing the Amazon brand,’” Wells Fargo analyst Matt Nemer tells the WSJ’s Bensinger and Morris. “Same-day delivery, ordering online and picking up in store are ideas that are really catching on. Amazon needs to be at the center of that.”

But Forrester analyst Sucharita Mulpuru says she doesn’t quite see the point of a “pseudo distribution center” on such prime real estate in a piece by Forbes’ Ryan Mac, who points out that Amazon CEO Jeff Bezos has been enamored of the idea at least since a Charlie Rose interview two years ago.

“Amazon’s value proposition is its huge selection and shipping that comes to me,” Mulpuru tells Mac. “Both those aren’t going to happen at a physical store in Manhattan.

“But what about its potential to serve as a touchpoint for Kindles and the Fire Phone?” Mac asks. “They’re not known for being the most visually creative people,” Mulpuru responds. “They’re not like Steve Jobs.”

That observation is readily confirmed by a photo of a storage locker accompanying CNET’s Donna Tam story reminding us that Amazon “has toyed with physical locations like pop-up shops and mall kiosks for its e-readers and tablets,” as well as the somewhat garish metal lockers.

Envisioneering Group analyst Richard Doherty, however, points out that “New York attracts many foreign tourists who shop on Amazon back home, but find many products only sold here,” reportsUSA Today’s Jefferson Graham. “A retail store offering same-day delivery could be ‘a tremendous uptick for tourists’ and generate ‘tremendous volume,’ Doherty says.”

And Creative Strategies analyst Tim Bajarin offers that “there's still a segment of the population that's touchy-feely. They want to see the product up close, and have it shown to them.”

Meanwhile, apropos of everything else it does and not specifically any foray into bricks and mortar, New Republic editor Franklin Foer has written an “Amazon Must Be Stopped” screed. “It’s too big. It's cannibalizing the economy. It's time for a radical plan,” the subhed on the piece informs us.

In other words, Amazon “has achieved a level of dominance that merits the application of a very old label: monopoly” and consumers are complicit, “seduced by the deep discounts, the monthly automatic diaper delivery, the free Prime movies, the gift wrapping, the free two-day shipping, the ability to buy shoes or books or pinto beans or a toilet all from the same place.”

What we need is someone like William Brandeis to rally behind and “inveigh against the debasement of small businessmen” lest we “drift toward an unsustainable future, where one company holds intolerable economic and cultural sway.”

Where’s Kris Kringle when you need him to make sense of all this?