Amazon Plans to Open Large Retail Locations Akin to Department Stores – WSJ
Online shopping pioneer wants a larger retail presence to sell clothing and household items and facilitate exchanges
Amazon.com Inc. plans to open several large physical retail locations in the U.S. that will operate akin to department stores, a step to help the tech company extend its reach in sales of clothing, household items, electronics and other areas, people familiar with the matter said.
The plan to launch large stores will mark a new expansion for the online-shopping pioneer into bricks-and-mortar retail, an area Amazon has long disrupted.
Some of the first Amazon department stores are expected to be located in Ohio and California, the people said. The new retail spaces will be around 30,000 square feet, smaller than most department stores, which typically occupy about 100,000 square feet, and will offer items from top consumer brands. The Amazon stores will dwarf many of the company’s other physical retail spaces and will have a footprint similar to scaled-down formats that Bloomingdale’s Inc., Nordstrom Inc. and other department-store chains have begun opening, the people said.
Amazon is planning to open department stores that are smaller than most at 30,000 square feet, but suggest they are getting more serious about a larger physical presence.
Could be a smart move to better compete with traditional retailers such as Wal-Mart and Costco that still beat Amazon on price for many items and are more able to do same day delivery. The stores could be used to get more inventory closer to customers and lower delivery costs.
I could see them launching Prime Members stores in a similar format as Costco that would would require a prime membership and instead of free shipping, members would be get lower prices if they pickup their orders or shop in the store.
Since they already have a relationship with Kohl’s with an option to buy shares I assume at a lower price it would seem acquiring them could be a good option if they get really serious about the department store concept.