The tech giant, Amazon has plans to enter the offline retail industry with its departmental stores opening in the U.S., according to the Wall Street Journal.The stores are likely to cater furniture, clothing, electronics and household items,. The first two locations will be in Ohio and California.
Consumers may see Amazon partnering with some high-end private labels in their launch. Notwithstanding, the unnamed sources suggest, plans may change.
The offline move is said to be a sales-motive step for extending sales alongside e-commerce revenue. Reportedly, the stores are expected to be around 3000 Square feet, making them smaller than departmental stores, albeit, will appear to be large supermarkets or assortments.
None of the Amazon spokesmen has commented on the subject yet.
Neil Saunders, the managing director of Global Data, stated, “More stores bolster Amazon’s whole ecosystem and flywheel.” Global Data is a market research firm wherein Neil Saunders handles retail market research. “They also allow Amazon to gather data and to understand consumer preferences better — understanding that can, in turn, be used to improve the whole proposition,” he further added.
Currently, Amazon consumers have to make product returns through the respective affiliated partners. However, the offline stores will enable customers to make such returns at Amazon offline store locations; Saunders suggested while continuing the discussion.
Amazon has previously put Walmart behind to lead the apparel retailer market in the U.S. Entering the offline retail market will expand the company’s market share, which is between 30-35% in the online apparel and footwear market at present.
Additionally, Amazon’s plans of expansion into the luxury fashion industry are getting media attention. In 2020, it collaborated with Oscar de la Renta to introduce its fashion storefronts on the website.
The lack of innovation and agility are factors that have prevented offline markets from surviving the competition. Though the offline market is not dead yet, it is neither making unprecedented moves to outsmart e-commerce.
However, with Amazon launching departmental stores, it is viewed as an opportunity in the industry. The news will make the offline retail market competitive in the U.S., according to market experts.
The store chains were already seen facing issues in its expansions ever since online e-commerce became a hit among consumers. Therefore, it will be interesting to see how the market takes shape with the tech giant’s entry.
While the media awaits an official announcement by Amazon, the news has made present offline market players watchful with their market and growth plans.