Back to the Future: Amazon Pushes Into Brick-and-Mortar Retail
Amazon (AMZN) is one of the most successful companies in history and often associated with the rise of online shopping. Thus, it may come as a surprise to see the tech giant planning to launch a brick-and-mortar clothing and shoe store in LA. This is all happening 20 years after Amazon began selling clothes online, eventually growing into the largest clothing retailer in the US.
Executives say this venture is named Amazon Style, reflecting the fact that consumers want a mix of in-store and online shopping. Amazon says its brick-and-mortar store will allow customers to discover new brands, which can be difficult when shopping online. Analysts note the new store is leaning on some longstanding concepts in the retail industry.
Amazon Executives Push In-Store Experience As Unique
Amazon Style will be located in a high-end shopping mall and feature a single sample item displayed inside the store. Customers will scan a QR code using their Amazon app, and a clerk will then have the clothing ready at a nearby counter. Fitting rooms will have touch screens allowing customers to request different colors or sizes, and the app’s algorithm will suggest similar items that may be of interest as well.
Company executives describe this as a unique shopping experience, but some of Amazon’s competitors have already tried out similar concepts. For example, American Eagle (AEO) has experimented with fitting rooms outfitted with tablets customers can use to request different styles and sizes. Likewise, Nike (NKE) customers can scan codes on items that are then delivered to fitting rooms.
Analysts Note Risks When Going Brick and Mortar, But Amazon Has Experience
This isn’t Amazon’s first attempt to establish a brick-and-mortar store, and executives say they’ve been working on the Amazon Style concept for years. Back in 2015, Amazon Books opened in Seattle, and Amazon purchased 471 Whole Foods stores two years later. Executives haven’t said when Amazon Style will open. It’s also not clear how many locations they plan to launch or where they’ll be located.
Amazon’s brick-and-mortar revenue was down 0.18% in 2019 and 5.6% during the pandemic-influenced 2020. However, analysts note positive signs for Amazon’s in-store efforts as sales increased 1.5% in the first nine months of 2021 compared to the year prior. But how shoppers react to the tech giant’s first “real-world” clothing store remains to be seen.
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