Amazon is closing all Amazon Books, its physical bookstores, and its 4-star Amazon and Amazon Pop Up stores in the United States and the United Kingdom. In total, the company will get out of 68 establishments. Apparently, physical business is no longer paying off and the company prefers to focus on areas that have proven more profitable.
Amazon stores never made it to Brazil. The company has been testing for years to enter physical retail in the United States, but it seems that the investment is no longer making up for it. With the new decision, the chances of us Brazilians seeing such a store around here have dropped even more.
The information was initially published by Reuters, which spoke with an Amazon spokesperson. The closing dates vary by location and the company said it will help affected employees find roles in other sectors of the company.
Workers who choose not to stay will receive compensation packages, according to the company’s spokesman. However, Amazon declined to share how many people will be affected by store closures.
Closings are the result of bad quarter
The company recently launched a series of physical business concepts that merge face-to-face experience with technology and online resources. In January, for example, Amazon announced the launch of its first physical clothing store, Amazon Style, which is expected to arrive in the United States later in 2022.
On the other hand, the Amazon 4-star that are being closed have already tried to innovate with operations in the physical store linked to digital, presenting the best-selling products in its marketplace in the showcase. However, it seems that Amazon’s strategy hasn’t worked out too well so far.
Sales growth in physical store units was noticeably behind the company’s overall online retail business. Other company outlets, which include Whole Foods and Fresh supermarkets, recorded lower sales in 2021 than in 2018, the spokesperson told Reuters.
Last quarter’s financial results were the main reason for store closures. Amazon changed its stance after recording the lowest quarterly retail growth rates since 2001. After the figures were released, the company’s shares fell 8%. Last year, its stock market performance was the worst among the Big Tech group, which also includes Apple, Microsoft, Google and Meta (ex-Facebook).
According to an Amazon spokesperson, the company continues to build concepts and technologies for physical retail in the long run. So the plans for Amazon Style continue to stand at this first moment. In addition, the company also said it will continue to focus on the Amazon Fresh and Whole Foods supermarket chains, and the Amazon Go convenience store.
Even with low results, Amazon’s physical stores are still its laboratory for new technologies. The company has already introduced several technological experiments for retail such as the “Just Walk Out” system. Other tools include Amazon One, which allows users to scan their palms to pay for items, and Dash Carts, sensor-filled shopping carts that allow shoppers to check out without a box.