According to sources, the e-commerce giant Amazon will open physical stores, and the business model will be similar to department stores; however, the store is expected to be smaller than general department stores, and new stores are rumored to be opened in Ohio and California.
Sell clothing, furniture, electronic products, mainly own brands
Amazon’s first batch of department store retail space will have 30,000 square feet, which is less than the 100,000 square feet of most department stores. It is not yet known which brands will be sold in the store, but it is said that it will be based on Amazon’s own brands. Mainly, it sells clothing, furniture and electronic products, but the decision has not yet been finalized.
After Amazon suffered a serious impact or even collapsed the retail industry, this time it further continued to penetrate the physical retail industry; according to Wells Fargo, Amazon is now the largest apparel seller in the United States.
However, the once-popular department store industry in the United States has been struggling with fast fashion and online e-commerce over the years. The consulting firm "Customer Growth Partners" pointed out that in addition to cars, gas and restaurants, In the past ten years, department stores have achieved 10% of retail sales, but so far this year they have not even reached 1%.
After the new crown pneumonia epidemic, department stores such as JC Penney and other department stores have filed for bankruptcy management rights to change owners, or digital transformation; however, analysts and industry executives have not announced the end of life of the department store industry; John Edo, chief executive of Capri Holdings, the parent company of boutique brand Michael Kors Idol) said a few days ago: "Consumers have indeed returned to department stores to shop."
The source pointed out that Amazon launched the idea of opening a large store to display its own products about two years ago; the company's executives also believe that the physical store will narrow the distance with consumers and present its own products to attract customers. Amazon expects physical stores to collect customer data and provide a new shopping experience.
Amazon’s physical store sales increased by 11% in the second quarter of this year. In recent years, it has invested more resources in an attempt to enter the fashion industry, but it is still difficult to enter high-priced fashion; although last year’s high-end women’s clothing brand Oscar de la Renta sells dresses on Amazon, but few boutique brands follow.
Amazon currently has more than 20 bookstores across the United States, Amazon Go convenience stores, and 4-star stores that specialize in selling popular products. With department stores, once again entering the retail industry, it will hit the traditional market.
