According to the WSJ, Amazon's toehold in brick-and-mortar retail will be based in Manhattan:
Online retail giant Amazon.com Inc. plans to open its first brick-and-mortar store, according to people familiar with the plans.
The site, set to open in time for the holiday-shopping season on Manhattan’s busy 34th Street, would mark an experiment by Amazon to connect with customers in the physical world. Amazon has built its business on competitive pricing and fast shipping. Until now, though, it couldn't compete with the immediacy of a traditional store.
Amazon’s space at 7 West 34th Street, across from the Empire State Building in Midtown, would function as a mini-warehouse, with limited inventory for same-day delivery within New York, product returns and exchanges, and pickups of online orders. A customer could, for example, order a pan in the morning and pick it up that evening in time to use for dinner.
Amazon has of course been dabbling in retail for quite some time. They have delivery lockers, and they've also been installing vending machines at airports. Amazon has even had pop up stores in at least two locations, San Francisco and .
And now they're going to have a real store. It is worth noting, though, that we don't know how long it will last. This might only stay long enough to last out the holiday season.
On the other hand, it might be the first step towards a permanent physical footprint, and possibly even a merger with an existing chain. Target, for example, would make a good partner for Amazon. They're healthy and they're actually bigger in the US market.
Or, Amazon could go crazy and start buying up the leases for closing Radio Shack stores (I wouldn't buy the company), and build a chain from scratch.