Amazon Plans To Open Its Own Department Stores (seattletimes.com) 25
According to The Wall Street Journal, Amazon will soon open its own department stores, with a focus on apparel, electronics and household goods. The Seattle Times reports: The first stores are expected to be located in Ohio and California and will be about 30,000 square feet in size, which would be smaller than the typical department store, the Journal reported. The e-commerce giant, which last year had $386 billion in sales, has been expanding into physical retail in recent years, opening grocery stores, book shops and specialty pop-ups around the country. Analysts say its latest foray -- while unexpected -- provides an opportunity to reach customers in a new way.
"More stores bolster Amazon's whole ecosystem and flywheel," said Neil Saunders, managing director of GlobalData, a research and consulting firm that tracks the retail market. "They also allow Amazon to gather data and to understand consumer preferences better -- understanding that can, in turn, be used to improve the whole proposition." Traditional department stores, he noted, have been declining for years because of a "failure of innovate and adapt." Stores such as Macy's, J.C. Penney and Kohl's, which made up about 15% of retail sales in 1985, now account for less than 3%, Saunders said.
The pandemic has created new challenges for the nation's department stores, tipping a number of storied chains, including Neiman Marcus, J.C. Penney and Lord & Taylor into bankruptcy. Nearly 200 department stores have permanently closed since last year, and another 800 -- or about half the country's remaining mall-based locations -- are expected to shutter by the end of 2025, according to commercial real estate firm Green Street. But for Amazon, this could be an opportunity to shake things up: Its 30,000-square-foot department stores would be about one-third the size of a traditional mall anchor, mirroring plans by many of the country's retailers to open smaller, more easily-accessible stores. "If it gets rolled out in a serious way, it is very bad news for traditional department stores," Saunders said. "The lack of innovation by traditional department stores means their defenses are very weak so the last thing they need is to fend off a new invader to their space." "The move makes sense," says Bloomberg Intelligence senior retail analyst Poonam Goyal. "It'll extend Amazon's reach beyond Amazon Go, Whole Foods and Kohl's while also opening up more distribution points. At 30,000 square feet, the locations will be more appealing than traditional on-mall department stores that are three times bigger. Off-mall strip centers could be sought, given their better traffic profile."
"More stores bolster Amazon's whole ecosystem and flywheel," said Neil Saunders, managing director of GlobalData, a research and consulting firm that tracks the retail market. "They also allow Amazon to gather data and to understand consumer preferences better -- understanding that can, in turn, be used to improve the whole proposition." Traditional department stores, he noted, have been declining for years because of a "failure of innovate and adapt." Stores such as Macy's, J.C. Penney and Kohl's, which made up about 15% of retail sales in 1985, now account for less than 3%, Saunders said.
The pandemic has created new challenges for the nation's department stores, tipping a number of storied chains, including Neiman Marcus, J.C. Penney and Lord & Taylor into bankruptcy. Nearly 200 department stores have permanently closed since last year, and another 800 -- or about half the country's remaining mall-based locations -- are expected to shutter by the end of 2025, according to commercial real estate firm Green Street. But for Amazon, this could be an opportunity to shake things up: Its 30,000-square-foot department stores would be about one-third the size of a traditional mall anchor, mirroring plans by many of the country's retailers to open smaller, more easily-accessible stores. "If it gets rolled out in a serious way, it is very bad news for traditional department stores," Saunders said. "The lack of innovation by traditional department stores means their defenses are very weak so the last thing they need is to fend off a new invader to their space." "The move makes sense," says Bloomberg Intelligence senior retail analyst Poonam Goyal. "It'll extend Amazon's reach beyond Amazon Go, Whole Foods and Kohl's while also opening up more distribution points. At 30,000 square feet, the locations will be more appealing than traditional on-mall department stores that are three times bigger. Off-mall strip centers could be sought, given their better traffic profile."
Amazon, get it over with (Score:4, Insightful)
Just change your name to Buy n Large already.
Keep Shopping Citizen (Score:3)
Not Entirely True (Score:2, Insightful)
The pandemic has created new challenges for the nation's department stores, tipping a number of storied chains, including Neiman Marcus, J.C. Penney and Lord & Taylor into bankruptcy.
Thanks to corporate greed and general incompetence, these companies were closing stores and on the verge of bankruptcy long before the current pandemic hit. The pandemic just gave them only last push over the edge.
For the CEOs who drove these companies into bankruptcy, the COVID pandemic has been a blessing because it gives them a convenient scapegoat and diverts attention away from their own corruption and incompetence.
I wonder ... (Score:2)
I don't think it'll work (Score:2)
Re: (Score:3)
A few reasons why Amazon succeeded and took sales away from the department stores are price, wider selection, one-stop shopping for multiple items, fast shipping, and department stores (at the time) had poorly designed websites for online shopping. But there is still a large number of people who want to shop in-store or don't want to wait a few days for an order to arrive.
Amazon can also use their stores as Amazon Locker locations and for processing returns. That drives foot traffic and repeat customers.
Wit
Re:I don't think it'll work (Score:5, Interesting)
1. Make it free delivery to the local store without Prime.
2. Allow customers to pay for delivered things with cash in store. This gives them access to the poor credit folk without credit cards.
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2. Allow customers to pay for delivered things with cash in store. This gives them access to the poor credit folk without credit cards.
Amazon's solution for these people is Amazon Cash [amazon.com]. Amazon just needs to market it more and better because I don't think that many people know about it.
How would allowing customers to pay for stuff with cash in-store work though? Would Amazon have kiosks in the stores for people to use and that would print out a barcode or QR code for an order that would then be taken to a cashier? Would these people order stuff off Amazon using the Amazon app and then give them 24 hours (with guaranteed pricing) to get to a
Sears Catalog Store (Score:2)
I am old enough to remember the Sears Catalog Stores. You could literally flip though the catalog with the clerk who would help you fill out a complete order. They may have display models of different things. You could have your order delivered to the catalog store rather than your home if there would be no one to received the package or if delivery was difficult, and they'd call you when the order came in. They would have fitting rooms so if you ordered clothes you could try them on. If they didn't fit you
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A series of thrift stores to destroy Goodwill (Score:3)
Amazon seems to have an enormous amount of second hand materials; clothing, electronics, household goods.
Sell it for pennies on the dollar, and save the cost of destroying or burying pr burning all the returns.
Finally the new Sears? (Score:3, Funny)
Finally the new Sears, Roebuck and Co.? Sears basically started with their mail-order catalog, added department stores, and eventually committed Internet suicide.
Amazon took advantage of that situation.
Re:Finally the new Sears? (Score:5, Informative)
Sears did a lot of stupid things. First, they could have gone the route of keeping their good name and charging more for top brands and decent quality items, keeping Craftsman tools made in the US, and focusing on quality, and repeat business. There was a time where a Sears appliance was 100% serviceable, where you could haul it to their appliance repair facility, or find parts.
However, Sears went the dumb route. They cut support to the bone and went cheap. Of course, they didn't have the logistical infrastructure to try to compete against Wal-Mart in WM's home court, so they are now history. However, had they went the route of decent goods and not the cheapest crap off the boat, for a price that isn't rock bottom, most likely, they would still be here today.
Amazon knows this, and ironically is following the old school Sears route. Solid mail order business, smaller stores, then getting larger stores. Done right, Amazon can easily take a niche that Sears, JCPenneys, and other department stores had.
Re: (Score:3)
Vulture Capitalists are part of what did in Sears, Roebuck and Co. Why work on making your business profitable when you can leverage to the hilt and pay yourself and your smart investor friends a thick cut off the top?
They fumbled the ball on the internet, for sure, but the play-callers kept putting on "Hail Mary" plays, down after down. Sure, they're splashy when they work...
Re: (Score:2)
...Sears went the dumb route...had they went the route of decent goods and not the cheapest crap off the boat, for a price that isn't rock bottom, most likely, they would still be here today.
Amazon knows this, and ironically is following the old school Sears route. Solid mail order business, smaller stores, then getting larger stores. Done right, Amazon can easily take a niche that Sears, JCPenneys, and other department stores had.
Amazon exists today and became THE mega-store, by doing one thing better than everyone else; selling the cheapest crap off the boat at the lowest price.
Done right? They can afford to do it wrong and actually sell at a loss for a while, just to drive competition out of business. Sure the Amazon "business" model of massive government lobbying to become untouchable may be profitable. Just don't assume you'll still hold any standard values, morals, or business ethics.
Just what my Ohio small town needs (Score:1)
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Re: (Score:2)
What? The job of shill doesn't pay enough?*
*I kid, but as much as we all call each other shill it should be a living wage.
Buy Sears already (Score:2)
I'm tired of seeing them bleed and flounder.
Re: (Score:1)
Why bother? Amazon can already get the (closed) Sears store for a song.
Won't matter (Score:1)
They, like other stores, won't have what I want because I'm not the typical obese American. It's why I stopped shopping at the big boys: they refused to carry what I needed.
Why? (Score:2)
The only reason I use Amazon is so that I DON'T have to drive to a store
Sears Wasted An Opportunity (Score:2)
Had they embraced the Internet, put their catalog online, and invested into online checkout, they would have destroyed Amazon before they had a chance.
Alas, here we are, and Amazon is creating retail stores with popular-selling products (effectively instant shipping) and the easiest form of online returns.