Amazon Is Getting a Lot Less Physical

Photo by Ellie Burgin on Pexels.com

Even as it continues its expansion in the grocery sector, Amazon announced yesterday it was shutting down all its bookstores as well as its 4-Star and pop-up locations.
It amounts to a total of 68 stores in the U.S. and Great Britain and represents a surprise cutback in the online giant’s ongoing efforts to build out its physical store presence. Just this week it opened the opening of its first Whole Foods location – it bought the chain in 2017 – using its proprietary Just Walk Out technology that allows shoppers to make their selections and leave the store without any check-out process. The stores use a series of cameras and sensors that record purchases and then automatically charge them to a customer’s Amazon account. It has been testing and expanding that technology under a variety of names, sizes and formats for the past several years.
The book stores first opened in 2015, with a test store near Amazon’s Seattle headquarters and has since been expanded to 24 locations around the country as of last year. In addition to books – the first merchandise category Amazon began selling when it started in 1994 — the several-thousand-square-foot locations also sold Amazon devices and other products, often incorporating a coffee bar as well. It is not believed that any of book stores employed the Just Walk Out technology.
Nor did the 4-Star stores, which attempted to replicate in-person best-selling products from across a wide spectrum of merchandise classifications. There were believed to be about 30 locations in the U.S., some of them in regional shopping centers, others located in urban shopping neighborhoods.
Amazon never broke out sales at any of these non-grocery stores but the original report on these closings on Reuters quoted an Amazon spokesperson saying the company “remains committed” to building long-term physical retail concepts and technologies.
The spokesperson in the Reuters story pointed to new efforts in the grocery space as well as the company’s recently announced Style apparel effort.
Still the news was unexpected. Even though Amazon is well known for testing many different ideas – hardware, software, buying formats, retail concepts – its recent attention to physical retailing seemed to indicate this was a priority for the company. With the closing of its general merchandise stores, it looks like grocery is going to be the main focus going forward.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s