Amazon will shut down all 87 of its U.S. pop-up stores by the end of April, according to The Wall Street Journal. The closures will affect kiosks inside malls, Kohl’s stores and Whole Foods locations in 21 states. No information was provided about the fate of non-U.S. pop-ups.
Amazon is not abandoning its efforts to grow its brick-and-mortar presence — the retail giant still plans to add bookstores and 4-Star stores this year, according to an Amazon spokeswoman. These shops offer a broader selection of products than Amazon’s pop-ups, which focused on showcasing devices like voice assistants, tablets and e-readers.
Amazon also is planning to open dozens of its own grocery stores in several major U.S. cities, starting with one Los Angeles location by the end of 2019. At least two more openings are planned for early 2020; targeted cities include San Francisco, Seattle, Chicago, Washington, D.C. and Philadelphia. Supermarkets provide a good complement for the retailer’s e-Commerce operations, since they give consumers a reason to make more shopping trips.
“I think Amazon has recognized that pure-play e-Commerce is dead,” said Natalie Berg, former Global Research Director at Planet Retail and Founder of NBK Retail in an interview with Retail TouchPoints. “The structural economic advantages of being an online-only retailer have disappeared due to rising shipping and customer acquisition costs. Additionally, grocery was a priority for Amazon, and they would never be able to crack it without physical stores. The reason they have been so attracted to grocery is that it gives Amazon [shopping trip] frequency, which is something they hadn’t had until now.”
Amazon Go is also poised for a massive expansion, with as many as 3,000 new locations planned for the cashierless concept by 2021. The primary obstacle to opening more stores is cost; the original Amazon Go in downtown Seattle required more than $1 million in hardware alone.
Kohl’s also is moving away from the store-within-a-store concept following Amazon’s departure. The retailer will now spread Amazon products across the rest of the store at 200 locations, according to CEO Michelle Gass in a conference call. However, the retailer isn’t turning its back on alliances altogether: Kohl’s has partnered with Planet Fitness to open 10 side-by-side locations, with more planned for the future.