All kidding aside, Amazon, often blamed as the destroyer of department stores, has announced yet another in a long line of significant moves into the realm of brick-and-mortar retail. The first of these as-yet-unnamed Amazon department stores will reportedly open in California and Ohio, to be followed at some point by a national roll-out (see Accelerating news on Page 2.)
Back in 2013 in this publication, we ran one of several commentaries about e-commerce and the possible death knell of brick-and-mortar retail stores. This one included the graphic you see here,
depicting Amazon as a category-killing 900 lb. gorilla, crushing brick-and-mortar stores of all kinds as it reaped online retail dollars. At that time there was serious question about the ongoing survival of retail stores. Large traditional department stores were downsizing drastically as traffic and sales dropped. Whole chains disappeared (remember Borders, etcetera, etcetera, etcetera...). Flash way forward, and while much of what we worried about then has come to pass, and things have certainly shaken out to a degree, the world of brick-and-mortar retail did not end. In fact, that world is being revitalized by e-tailers like The Gorilla, which has committed to a veritable array of physical stores.
As you may be aware, Amazon now encompasses well over 600 retail locations, including its 500+ Whole Foods stores, but also including 26 Amazon Go stores, 23 Amazon Books stores, 31 Amazon 4-Star locations, 11 Amazon Fresh stores, several pop-ups, and a host of Amazon Locker and Pick-up locations. They’re even experimenting with an Amazon Salon location in the UK.Furthermore, given the degree to which a battalion of other formerly online-only retailers have followed suit, things look promising. Take a short walk through any local mall (such as the one I took earlier today) and you’ll encounter online-to-physical merchants such as Warby Parker (145+ stores), Casper (67+ stores), Untuckit, ThredUp, ThinkGeek, Bonobos, Boll & Branch, ModCloth, Rent The Runway, and many more. These companies are learning to cultivate customers through a variety of channels, including live hands-on shopping.
They have to do so. The Pandemic made us all ask, will the huge rise in Covid-era online sales finally kill stores, and will people return to shop? Now post (or, at least nearly post) Pandemic, it appears that they will and they have, and while online shopping chugs along nicely, physical stores are opening at a brisk pace (look at our News stories in this publication and compare the number in the Accelerating section to those in the Decelerating section - especially restaurants, about which perhaps a later commentary).
Of course the point of all this is that its no longer either/or, but that retailers and e-tailers of many types, including Amazon, are learning that their businesses don’t have to be one thing, and that there’s a significant desire among shoppers to visit a physical store, particularly in a world in which more people than ever before have, at the same time, both fully embraced online shopping and learned the need for and value of the vital, in-person experience of visiting a physical store.
Amazon should benefit from their history and wealth of knowledge about what should sell, and they certainly should benefit from years of observing the missteps of traditional department stores. As a dedicated in-store shopper, and an inveterate Amazon Prime customer, I’m looking forward to strolling through the various departments of Amazons new stores - live and in person.