Starting as a simple online platform for the sale of books, Amazon has had a long history of growth in the digital ecosystem, to the point of becoming one of the most important figures in the world of electronic commerce, with a wide diversification of products and services.
In addition, the company has also explored other sectors, such as advertising, computing and programmatic services, streaming, among many others. Even doing a reverse process to what we might be used to, he ventured into the world of physical stores with various bookstores , pop-up stores , and more recently with his food business, Amazon Fresh .
Following this process of continuous evolution, the company is now in the process of restructuring its network of physical points of sale. His idea is to gradually close retail-oriented retail markets and target large-scale businesses related to the food sector.
Amazon will close its physical stores due to the minimum income presented by these subsidiaries
Amazon’s commitment to offline commerce, which began in 2014 with a store in New York, has not been entirely successful for the company, despite the effort and ingenuity that accompanied the project. With its bookstores, for example, Amazon intended to create a system from its extensive database, offering consumers a digital link in physical stores with the reviews given to the books on the same website , as well as functions to be able to be aware of what other people are reading.
Another of the company’s attempts to bring its best-selling and best-valued products closer to consumers was that of “4-star” physical stores, which have an exclusive catalog of products with 4- or 5-star ratings. in the web. We can also mention the Amazon Go stores , a proposal for stores without cashiers that work 100% digitally.
All these projects of physical subsidiaries -which have required large investments- only explain 3% of Amazon’s turnover, which last quarter was around €124,000 million. This shows the low profitability that these fronts present for the company, supporting its recent decision to definitively close its retail-oriented offline branches. Check out latest article on our site.
Amazon ends up betting on its food business
According to the information provided by the company, bookstores and 4-star stores will begin to close gradually and on different dates. The same will be notified to users by means of posters located in the premises themselves. On the other hand, it has been clarified that store workers will have the option of receiving compensation or assistance in finding a new job at the nearest company store. The Amazon Go and Amazon Fresh business models will not be affected.
This decision comes at a contradictory moment, since just over a month ago the company announced the opening of a new physical store model, Amazon Style , as a commitment to the fashion sector with an innovative and disruptive sales format . These stores will provide buyers with a more fluid and dynamic experience through different technological integrations within the process. We will have to wait to see if the public responds well to the initiative, or if the company will have to shuffle and give again to accommodate market trends.