Amazon department stores

There is fresh speculation today that we could soon see Amazon Department Stores appearing across the country as the eCommerce giant looks set to further their experiments with physical retail. This comes from an apparent insider at the Wall Street Journal.

It is alleged that Amazon wants several larger physical locations starting out in California and Ohio with a size similar to the likes of Kohls or T.J.Maxx. It is thought that the locations will serve primarily to increase the sales of apparel and home goods, especially amongst Amazon’s own private-labeled brands.

This is of course not Amazon’s first experiment into physical retail as 3 years ago they launched their first cashier-less Amazon Go store in Seattle, and 4 years ago they acquired Wholefoods. This expansion as a type of Amazon Department Store would be new ground entirely, and at this time it is not clear exactly what is driving Amazon down this path.

They already claimed the crown of number 1 retailer from Walmart with hardly any physical presence at all, and with eCommerce often referred to as the death of retail this would seem almost a backward step. If we suspect that World domination is the aim, then going after the offline market with Amazon department stores could be the next logical move.

Amazon Department Stores – Back To The Future?

Just a few years ago department stores were the staple for many a household as the one-stop-shop for all of your needs. Just a few years ago, department stores comprised 10% of total retail sales, excluding automobiles, gas, and restaurants. Now according to estimates from consulting firm Customer Growth Partners, this year they account for less than 1%. Understandably there could be some Covid-19 impact to take into account there, however, the internet has undoubtedly stolen business from physical stores.

This leads us to the question is Amazon sending us back to the future? For the past decade, these internet giants have strived to replicate the in-store experience online through multiple tools and features to help sellers buy items they couldn’t physically see or touch. Are Amazon department stores an acknowledgment that this just isn’t possible and there is some need for physical stores for some shoppers with categories such as home and apparel?

At this moment Amazon department stores are purely speculation with an Amazon spokesperson commenting that they “Do not comment on rumours” when asked about the subject. Although an insider has stated that just a few years ago Amazon did approach some U.S apparel brands and pitched the idea of opening large physical locations from which they would advertise their brands.

It would also be reasonable to assume that any Amazon department stores would also feature state-of-the-art technology similar to what we see in Amazon Go stores and most likely an inbuilt collection and return facility for orders purchased online. There could even be the option for third-party sellers that utilize FBA to opt-in for in-store displays too.

As mentioned there has been no official announcement from Amazon on this matter, but we will keep you updated on any further developments on this story.

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