Amazon Opening Retail Brick and Mortar Stores to Compete With Department Stores

The global e-commerce company has made other retail moves in the past few years.

Amazon-Opening-Retail-Brick-and-Mortar-Stores

There is mounting speculation that Amazon plans to open department-store size retail locations. The Wall Street Journal is one of the first publications to report on the potential move by the world’s largest e-commerce enterprise, and the first Amazon stores will likely be opened in Ohio and California. The stores will be rather large and occupy around 30,000 square feet, which would size up comparatively speaking to a T.J. Maxx retail store or a Kohl’s.

The newspaper is cited as saying it has had conversations with those familiar with Amazon’s retail ambitions.

Some familiar with the plans believe the move to be ironic since Amazon has already captured much of the market share from established retailers. Amazon recently topped Walmart as the largest retail seller in the world, located outside of China. The behemoth has also opened a number of brick-and-mortar grocery stores, cashier-less convenience stores, and other retail outlets over the past few years. The company also purchased Whole Foods a few years ago.

The news about Amazon hit shares hard for many big-box retailers, including Best Buy, Target, and Bed, Bath, & Beyond. Stock prices for the retailers fell sharply, about 1.5 percent lower during premarket trading. Walmart shares also struggled and were around 1 percent lower.

When prompted for a comment, Amazon would not confirm or deny the potential plans. But the Wall Street Journal says the retail stores would, in all likelihood, sell clothing and electronics. Should Amazon open physical store locations, fixed prices are likely to be higher. Still, the advantage for consumers is that they would be able to try on clothing and examine their merchandise in person before purchasing. Amazon will also probably have its own private label products as part of its stores’ inventories.

Amazon’s share prices are more than 1 percent down so far this year. The company has a $1.59 trillion market value as of this writing.

 

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