Amazon's physical retail business is on a downward spiral as the e-commerce giant confirmed that it would close 68 retail stores across the United States and the United Kingdom.
The closure will include the Amazon Books bookstores, its pop-up shops in several markets, and its 4-star stores, where customers could shop popular and highly rated products across the company's website.
Amazon to Close 68 Retail Stores
According to Reuters, the e-commerce giant launched its first physical bookstore in Seattle back in 2015, then slowly expanded its physical footprint to include more locations across the United States, including states like California, Arizona, Colorado, Illinois, D.C, Massachusetts, Maryland, New Jersey, New York, Tennessee, Oregon, Texas, and Washington.
The stores did not just give a place for customers to interact with Amazon items in real life, including its hardware devices. They also served as a convenient spot to choose merchandise bought online or make returns.
In the next few years, Amazon's retail footprint expanded to include Whole Foods, with the $13.7 billion acquisition of the grocer in 2017, plus its own Amazon Fresh grocery stores.
Amazon has been testing its Just Walk Out cashierless shopping technology at a growing number of Amazon Go convenience stores, which were not a part of the planned shutdown.
The e-commerce giant told Reuters that it would alert shoppers to the upcoming closures through in-store signage, as the actual closing dates, may depend on the location. It also said it was working to find new roles for employees affected, when possible, or offer them severance.
The decision to exit so much of its physical business follows a couple of years that have made in-person retail more challenging for everyone, as the COVID-19 pandemic sent more consumers online as foot traffic to local stores declined.
However, this decision also came at a time when Amazon retail workers had started to organize, though in this case, at an Amazon Fresh grocery. The union push saw the retail workers demanding better wages, more flexible attendance policies, longer breaks, and other benefits, according to Insider.
Shutting down several of its physical stores immediately after such demands seems to send a chilling message to all Amazon retail workers that the company does not value its physical retail business.
However, Amazon said that it would continue to work on its cashierless grocery stores and other concepts, like the recently opened physical clothing stores in Los Angeles, called Amazon Style.
Though a small part of its broader retail business, Amazon's physical stores made the company billions. In Q4 2021, the company reported its physical retail business generated $4.68 billion, up from $4.02 billion in the year-ago quarter.
Amazon Style
According to TechCrunch, Amazon opened its first-ever Amazon Style physical clothing store in Los Angeles with the promise of a high-tech shopping experience. It offers brands consumers know, and the app will allow you to select an item, size, and color and send it to a fitting room or pickup counter.
The company also touted other retail developments in the quarter, in addition to Amazon Style, including the opening of the first Starbucks Pickup with Amazon Go store in New York, and plans to add two more stores in 2022.
Related Article : Amazon Is Testing Cashierless Grocery Shopping In Bigger Stores
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Written by Sophie Webster
