Tech and e-commerce giant Amazon reportedly plans to open multiple large physical stores across the United States that will operate similarly to department stores. Amazon is already the largest seller of clothing in the United States.
The Wall Street Journal reports that Amazon plans to open multiple large physical retail locations in the United States similar to department stores. The decision comes as the company aims to increase the sales of its clothing, household items, electronics, and other products.
It is expected that some of the first locations will open in Ohio and California. The retail spaces will be around 30,000 square feet, which is smaller than the average department store — which spans around 100,000 feet. The Amazon stores will still be a huge increase in terms of size over its Amazon Go grocery stores and will reportedly look something like a scaled-down Bloomingdale or Nordstrom store.
It is expected that the Amazon stores will stock top brands as well as the company’s own private-label products. Currently, Amazon is the largest seller of clothing in the United States, according to Wells Fargo & Co.
Department stores have seen a major decline in popularity in recent years, partially caused by the rise in e-commerce that Amazon contributed heavily to. 25 years ago, department stores accounted for about 10 percent of all retail sales, excluding automobiles, gas, and restaurants. According to analysis from the consulting firm Customer Growth Partners, they now account for less than one percent.
As the coronavirus pandemic grew, department stores took an even bigger hit with many shoppers reluctant to visit physical locations. Companies such as J.C. Penney, Neiman Marcus Group Inc., Lord & Taylor, and Stage Stores Inc. were all forced to file for bankruptcy.
But analysts are expecting that department stores will be around for some time. It’s expected that chains including Macy’s and Kohl’s will report strong sales in the coming months as many shoppers rush to restock on clothing after reducing purchases last year.
Read more at the Wall Street Journal here.
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