Amazon Rolls Out Department Stores

Amazon’s Brick-and-Mortar Retail Store Plans

Amazon (AMZN) is expanding into the physical retail world after spending years disrupting it. The nation’s biggest online retailer is gearing up to open bigger retail stores in several locations across the country in an effort to boost sales of clothing, household goods, and electronics.

Amazon’s move to open department-like stores is an about-face for the company. After all, Amazon has been blamed for the demise of many traditional retailers as it ate away at their market share over the years. Its cheap prices and quick shipping have also impacted mall operators, which have seen business slow and storefronts sit empty. This year, Amazon replaced Walmart (WMT) as the nation’s biggest retailer for the first time ever. In the 12 months ending in June, Amazon had $610 billion in sales, while Walmart had $566 billion.

Stores Coming to California and Ohio

Amazon is expected to open some of its new stores, which will be about 30,000 square feet, in California and Ohio. The locations will be much larger than its existing Amazon stores, but will be smaller than department stores, which typically have 100,000 square feet of showroom space. The stores will be similar in size to the new smaller retail locations which Nordstrom (JWN) and Bloomingdale’s (M) are launching.

Shoppers should expect Amazon’s private label brands to be displayed prominently in its stores. It is not clear what other brands Amazon plans to carry. Shoppers will have a variety of items to choose from including clothes, furniture, electronics, household products, toys, and other categories.

Amazon Gives Consumers Instant Gratification

By opening physical stores, Amazon will be able to provide customers with more items they can try on or interact with in person before making purchases. That should help sales of apparel and shoes in particular, as these items can be difficult for some consumers to purchase online. Customers will also get instant gratification from the new stores, instead of having to wait for products to arrive when shopping on Amazon.com.

Amazon is also hoping the stores will give customers new ways to engage with the ecommerce giant. The stores will also provide a venue to show off products shoppers may not find online.

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