Rumors surfaced this weekend that online retail giant is secretly planning to open its own stores on high street. Citing unnamed property owners, the Sunday Times reported that Amazon “is understood to be scouring the country for high-profile sites“.

The rumored purpose: Amazon wants to give its customers the ability to order online and pick up in-store. Major brick-and-mortar retailers have seen their own ‘click-and-collect‘ services gain steam and it doesn’t take a leap of faith to imagine that Amazon sees its inability to deliver a similar service as a potential threat to its competitiveness.

According to Reuters, however, the rumors aren’t true. It cites an Amazon spokesman who told it that Amazon isn’t looking at physical stores. The spokesman would not elaborate on possible future plans.

Needless to say, it’s hard to tell whether Amazon’s denial is really the end of the story. Where there’s smoke, there’s often fire, and for obvious reasons if Amazon is on the prowl for property, it wouldn’t want the world to know. But even if Amazon isn’t going to be setting up shop on high street, the question becomes ‘Should it?‘ That’s not such an easy question to answer.

On one hand, there’s good reason to expect that click-and-collect is only going to grow in popularity. The internet provides for a pressure-free, convenient shopping experience, while being able to pick up an internet purchase in person provides a form of instant gratification. That’s a powerful combination for consumers. One that Amazon isn’t currently providing but that increasingly web-savvy brick-and-mortar retailers are. Plenty of reason for Amazon to look closely at taking its act offline.

Yet on the other hand, Amazon has built a $50+ billion company by perfecting pure-play online retail. While I have no doubt about the company’s capabilities, one has to wonder if such a move won’t somehow distract it from its core business: selling online. Depending on how big Amazon’s offline ambitions and the approach it takes to realizing them, an offline strategy could potentially even change Amazon’s cost structure.

At the end of the day, whether Amazon sets up shop on high street (or main street) will depend on where the company thinks retail is headed. More than a decade after the .com euphoria had investors piling into Amazon stock thinking that the internet was the future of retail, Amazon has finally grown to be the company many expected it could be. But there are plenty of signs that the future of retail may be the merger of physical and virtual, and if that’s the case, Amazon may have little choice but to cozy up to high street some point sooner than later.

Photo credit: bravenewtraveler via Flickr.