Last week Amazon announced that it will close two “Amazon style” locations that are located in Glendale, California and Columbus, Ohio. It is of note, since Amazon has already closed other outlets including bookstores and specialty retail stores. Nonetheless, Amazon has concentrated on physical grocery stores including Whole Food Markets and Amazon Fresh.
Amazon spokeswoman Kristen Kish issued a statement that the company’s physical retail “remains an important part of our business, and we continue to invest in growing our grocery store business.”
Bloomberg had the facts early about the store closures. In fact, they closed last week on November 9th. The first Amazon Style store opened in 2022, where employees brought clothing to fitting rooms. Customers had to scan codes on displayed items.
Grocery stores are likely to grow – there are over 500 Whole Food stores in operation. The company operates generally as it was acquired for $13.7Billion in August 2017. Sure, changes were made such as pick-up of Amazon purchases in special, secure cases. Andy Jassy, CEO, has said the company is “leaning into physical retail models that work for the customer and contributes to the bottom line.”
It is important to note that Amazon is facing more competition on line. As a result, Amazon has eliminated packaging and has introduced robots in its warehouses. I described the introduction of drones to deliver prescription drugs to customers. That is especially valuable for patients who live in isolated locations and who are in need for quick help.
POSTSCRIPT: We are facing a very competitive environment for the holiday selling season. We can visualize many sale items both in fashion and hard-lines. The Amazon customer expects value promotions and the rapid delivery based on Prime membership. The National Retail Federation expects retail sales to increase about 4%, a figure that I published earlier. While 4% is low, the estimate is reasonable, since customers are uncertain about their own discretionary spending power.