Ever since online retailers emerged, brick-and-mortar stores have struggled to stay relevant. It seems Amazon could be feeling the pressure as well. According to a March 6 report by the Wall Street Journal, the e-commerce giant will shut down its pop-up shops within the U.S, totaling 87 in number. The decision comes as executives review Amazon’s retail strategy and the profitability of selling goods in physical stores.
Amazon announced the opening of its pop-up stores in the United States back in 2016, after the success of a pilot program in which just six stores were opened.
The company found the pilot stores to be quite successful and profitable enough to rinse and repeat the strategy, leading to the opening of more offline retail stores where customers could experience the products before buying.
Speaking with the Journal, a spokeswoman for the tech giant said the company decided to shut down the physical stores after rounds of reviews and considerations. She confirmed that the closures would be finalized on April 29.
The pop-up stores started to appear within shipping establishments, grocery stores and Kohl’s, including the Whole Foods stores (which were acquired by Amazon in 2017, planting a massive retail presence for the e-commerce giant across the country).
Known as “a store within a store,” these pop-up shops were typically small, only measuring a few hundred feet in overall size. They were stacked majorly with tech devices manufactured by the company, including Kindle e-readers and the Echo digital voice-activated assistant.
The Amazon Effect Works on Amazon
The move isn’t entirely surprising, considering the decline in profitability that a lot of brick-and-mortar stores have been experiencing. Target, Kohl’s, Macy’s have all been affected, shutting down stores as if it was an annual event. Amazon itself contributed largely to this trend, with millions of consumers preferring to sit and shop from the comfort of their homes.
Then, Amazon took things up another notch. The company pushed out services like Prime Delivery, which provides same-day delivery for products ordered before noon, and next-day delivery for orders placed after the noon mark.
Big Boost for Amazon Books and Amazon 4-Star
The Journal also highlighted that Amazon would be looking to open some additional locations for Amazon 4-star and Amazon Books. More of these stores, which sell a range of toy, books, and others, are expected to be opened in 2020.
Besides these, a recent report confirmed that the e-commerce company will launch a new chain of grocery stores, separate from Whole Foods, as a way of reaching more of the traditional grocery market dominated by companies like Walmart and Publix and Albertson’s.
Something that the good folks at Arlington County might want to consider at their March 16 county board meeting. The County council is set to meet on whether to approve of Amazon’s proposal to open a second headquarters in their town; a move that came after New York City’s outright rejection of the e-commerce company.
A draft agreement between the town and the company been released, with Arlington promising to pay Amazon up to 15 percent of an increase in its hotel rates, provided that it can meet specific occupancy criteria.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
