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The pandemic supercharged e-commerce as even more consumers discovered its convenience. That led research firm FTI Consulting, for one, to move up its timeline by three years, to this year, for online sales to handily top $1 trillion.

The vast majority of shoppers still favor stores, however. About three-quarters of consumers prefer them even for ordinary household items, according to consultancy Big Village. Yet in a year when retailers drastically eased up on store closures and Amazon itself saw a 3% decline in its Q1 online retail sales, the e-commerce giant closed all of its bookstores, 4-star stores and pop-ups. The nearly 70 locations — 66 in the U.S., two in the U.K.— were almost the entirety of its non-food fleet. At press time all that remains in that category is a lone, newly opened Amazon Style apparel store.

Amazon said by email it closed these stores so it could focus on its other physical retail and tech offerings, and preserve its ability to innovate and scale its business for the long run. But by doing so, it may have lost an opportunity to take full advantage of its own pricing and tech prowess, and could be forfeiting sales in some categories, according to Big Village General Manager David Albert. Bigger picture, the company is withdrawing from a major part of the retail landscape, according to Kelly Goetsch, chief strategy officer at headless commerce platform Commercetools.

“Even as e-commerce continues to boom, brick-and-mortar locations play a significant role in enabling customers to have an immersive, in-person shopping experience,” Goetsch said by email. “I believe Amazon’s decision to close its physical locations failed to take this into account, and could possibly impact their business going forward as shoppers move back to physical retail post-pandemic.”

Not a retailer?

Then again, Amazon’s business is centered around logistics, technology and, increasingly, advertising, and not retail, some experts say. For years now, its third-party marketplace sellers have been responsible for the bulk of the merchandise sold on its site.

“Their ability to fulfill the way they do is a pretty amazing feat. That’s well understood,” Nick Egelanian, president of retail development firm SiteWorks, said by phone. “I don’t think anybody would say they’ve run phenomenal stores. We know that they don’t think those stores were so great, because they closed them.”

Several observers including Egelanian have described Amazon’s non-grocery stores as unfocused. This was especially true of its 4-star stores, which were merchandised with items selling well on its website, leading to a jumbled assortment of random stuff. And — unlike the many independent booksellers that have survived the price-based disruption unleashed by Amazon a quarter century ago — Amazon’s bookstores were not curated in ways that invited browsing or discovery, but instead mainly featured bestsellers.

“Warehouse fulfillment is a lot easier than running a retail store because, in retail, you’ve got to be good at the logistics and technology — plus 10 other things,” Egelanian said. “They haven’t proven they know how to merchandise, they haven’t proven they know how to operate, they haven’t proven they know how to brand, they haven’t proven they know how to assort. It’s a lot of ‘not provens.’”

GlobalData Managing Director Neil Saunders in emailed comments noted a dearth of omnichannel options. “Other than some payment technologies, Amazon never really connected its stores and online in the way that many retailers have done,” he said. “Options to order online and pickup from stores, or check stock levels before heading out, were non-existent. This, in our view, was a lost opportunity.”

Location choice has also been haphazard, suggesting a lack of understanding of site selection, Egelanian said. Amazon said that a lot goes into deciding where to open a store but declined to elaborate.


“It’s not at all clear to me that Amazon has a competitive advantage operating in brick-and-mortar retail.”

Kirthi Kalyanam

Professor and Executive Director, Retail Management Institute at Santa Clara University’s Leavey School of Business


“Every physical store has to have a store model,” Egelanian said. “There’s a financial model, but it also needs a demographic model and a physical model — how big is the store? How far does it reach? What is the optimal type of real estate it goes into? What’s the optimal number per market? What does it take to make money per market and per management structure? None of those things appeared to be present.”



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