Amazon to Increase Brick-and-Mortar Retail Presence with Department Stores

Chicago, USA Oct 8, 2018: Cars passing the Amazon E-commerce pick up store early in the night in the Loop.
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Amazon, Inc is planning on opening retail locations in the United States that will most closely resemble department stores to extend its reach in sales, clothing household items and electronics, the Wall Street Journal reports.

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The first stores are slated to be opened in Ohio and California, with the retail spaces will be slightly smaller than a typical 100,000 square foot department store, coming in about a third the size at 30,000 square feet.

The WSJ adds that the Amazon stores will have a footprint similar to scaled-down formats recently introduced by Bloomingdale’s and Nordstrom. These scaled-down stores are like microcosms of the larger, traditional department stores we are used to seeing. Big-name department stores have popped up mini versions of themselves in recent years to deal with target audiences and shopper fatigue for the larger, more time-consuming versions of themselves.

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Bloomingdale’s is opening its own mini version, “Bloomie’s” sometime this fall, and WWD reports that these smaller versions of the big box stores allow for expansion with less financial risk and obligation — a strategy Amazon is coming in hot for.

Initially taking away from the retail market share with its behemoth online business, Amazon’s plans represent a full-circle evolution to now grow into brick-and-mortar retail presence. The company’s growth in online shopping helped to accelerate the fall of mall operators and other physical store empires, the WSJ adds. Amazon is now the largest seller of clothing in the U.S., surpassing even Walmart the WSJ reports — so why not take that presence to the stores?

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Amazon already operates 20 physical bookstores throughout the country, and also has a physical presence with several of its Fresh on-the-go cashier-less grocery stores. It is unclear when Amazon is planning to break ground on its new mini-department store concept.

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About the Author

Georgina Tzanetos is a former financial advisor who studied post-industrial capitalist structures at New York University. She has eight years of experience with concentrations in asset management, portfolio management, private client banking, and investment research. Georgina has written for Investopedia and WallStreetMojo. 
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