El physical retail is suffering a severe blow confirmed in a Reuters article will close 68 physical retail stores in the US and UK. This includes its Amazon Books stores, stores in various markets, and its 4-star stores, where customers can purchase popular and highly rated products on Amazon.com.
The retailer, which began life as an online bookstore, launched its first physical bookstore in Seattle in 2015, then steadily expanded its physical presence to include more locations in the US and abroad.
The stores not only provided a place for customers to interact with Amazon merchandise in real life, including its hardware devices, but also served as a place to pick up merchandise purchased online or make returns. In later years, Amazon's retail footprint expanded to include Whole Foods, with the grocery store's acquisition in 2017 for $13.7 billion, in addition to its own Amazon Fresh grocery stores. And Amazon has been testing its Just Walk Out cashierless shopping technology in a growing number of Amazon Go stores, which were not part of this planned closure.
The decision to exit much of its brick-and-mortar business follows a couple of years that have made in-person retail challenging for everyone, as the COVID pandemic sent more consumers online as it dwindled. traffic to local stores. But this decision also comes at a time when Amazon retail workers had begun to organize, starting at Amazon Fresh, with a union push that caused workers to demand better wages, more flexible attendance policies, longer breaks and other benefits. according to information from Insider.
Closing dozens of brick-and-mortar stores in the immediate aftermath of such lawsuits seems to send a chilling message to all Amazon retail workers that the company doesn't value its brick-and-mortar retail business. Amazon, however, said it will continue to work on its cashierless stores and other new concepts, such as the recently opened physical clothing store in Los Angeles called Amazon Style.
Although they are a small part of its broader retail business, Amazon's physical stores have made the company billions. In the fourth quarter of 2021, the company reported that its physical retail business brought in $4.68 billion, up from $4.02 billion in the prior year quarter. Too a promoted other retail spaces in the quarter in addition to Amazon Style, including the opening of the first Starbucks Pickup store with Amazon Go in New York, and plans for two more stores in 2022.
