March 20, 2019

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Amazon Is Closing Pop-Up Stores, as Its Retail Strategy Evolves

Amazon Is Closing Pop-Up Stores, as Its Retail Strategy Evolves
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SEATTLE — Amazon is closing down its dozens of Pop-Up stores in the United States, as it both expands and tries to make sense of its growing retail operations.

The Amazon Pop-Up stores are stand-alone kiosks, often in malls, that showcase the company’s devices, like its Fire tablets and Echo speakers. Some are inside Kohl’s or grocery stores. Amazon’s website listed Pop-Up stores in more than 20 states.

The stores are closing even as Amazon is otherwise expanding its physical retail presence.

Before the holiday season, Amazon opened a gift shop-like store, Amazon 4-Star, in New York’s SoHo neighborhood, and for several years it has sold books and gadgets at Amazon Books stores. In 2017, it bought Whole Foods, greatly expanding its footprint.

“After much review, we came to the decision to discontinue our Pop-Up kiosk program,” an Amazon spokeswoman said in a statement, “and are instead expanding Amazon Books and Amazon 4-Star, where we provide a more comprehensive customer experience and broader selection.”

About a year ago, Amazon opened its first cashierless convenience store, Amazon Go, which uses sensors and cameras to track what shoppers buy so they do not need to check out. It now has 11 around the country. In December, the company revealed a small-format Amazon Go, selling grab-and-go food, that could operate like an enclosed kiosk in an office lobby or an airport.

Amazon’s stores, including Whole Foods, brought in more than $17 billion in revenue last year. In the fourth quarter, they were the only financial segment of its business that posted a decline in revenue from a year earlier, though Amazon said that was partly due to how the company reported Whole Foods purchases made online.

While Amazon grew because of the speed and convenience of home delivery, it is facing increased competition from Walmart and other retailers that see the combination of e-commerce and their physical stores as a key advantage.

“All things considered, stores are better than being online” because people can see and touch products they want to buy, said Simeon Siegel, a retail analyst at Instinet, an equity research firm.

Closing the Pop-Up stores shows that Amazon is learning and still shaping its strategy, Mr. Siegel said.

Such stores typically have flexible leases and offer easy ways to experiment.

“The Pop-Up store was born to be a test, and it appears to be they are using this to optimize their retail strategy,” Mr. Siegel said.

The closings were reported earlier on Wednesday by The Wall Street Journal.



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