Amazon confirmed reports yesterday that it will close 68 physical retail locations including all 24 of its bookstores. The first Amazon Books opened in 2015 to lukewarm fanfare in the tech behemoth’s hometown of Seattle as its inaugural brick-and-mortar storefront. Also on the chopping block are the company’s 33 4-Star locations, which feature a curated selection of top-selling items from the Amazon website, and its nine themed, kiosk-style “click-and-mortar” Pop Up locations in cities including Washington, D.C., Las Vegas, and Seattle. The closure also impacts Amazon’s retail locations located in the United Kingdom.
Reuters was the first to break the news, noting that the closures will allow Amazon to focus more on its Amazon Fresh grocery store concept, which first launched as Amazon Go Grocery before it rebranded last year to carry the same name as its same-day grocery delivery service first piloted in New York City in 2014. Currently, Amazon Fresh supermarkets, which harnesses the company’s Just Walk Out cashier-less checkout technology, boasts 24 locations across California, Washington, Illinois, Virginia, Maryland, Pennsylvania, and Washington, D.C. Amazon Fresh operates independently from Austin, Texas-based Whole Foods Market, which Amazon acquired in 2017 for $13.17 billion.
Also not impacted by the just-announced brick-and-mortar retail closures are the smaller format, grab-and-go Amazon Go convenience stores in Seattle, San Francisco, Chicago, and New York City.
Per Reuters, revenue from Amazon’s brick-and-mortal stores collectively represented $4.69 billion, or just 3 percent, of the company’s $137 billion in total sales last quarter. Most of that revenue came from Whole Foods, which has over 500 locations open or under-development across the United States (save for Alaska, North Dakota, South Dakota, West Virginia, Delaware, and Vermont), the U.K., and Canada.
In addition to shifting away from physical storefronts dedicated to selling books and top-selling toys and gadgets to focus on expanding its grocery-centered retail empire, Amazon will also reportedly further develop its nascent Amazon Style concept, an apparel-focused physical retail experience complete with QR codes aplenty and touchscreen-outfitted fitting rooms. Launched in January, the first Amazon Style is set to open later this year at the Americana at Brand shopping mall in Glendale, California.
Last August, in news that sent shockwaves through the dying brick-and-mortar retail sector, The Wall Street Journal reported that Amazon was gearing up for a shift into smaller-format department stores. At the time, the company dismissed the Journal’s reporting as hearsay. However, the forthcoming arrival of Amazon Style signals that the company is indeed dipping its proverbial toes into new, department store-esque waters.
Small, apparel-focused department stores operated by Amazon would “give customers even more instant gratification than the quick shipping offered by Amazon for online purchases,” said the Journal. Amazon was the top U.S. clothing retailer last year.
As for the just-announced closedown of Amazon Books, not an ounce of irony is lost in the news given that the ascent of Amazon was a major factor in the death of brick-and-mortar booksellers. While once-ubiquitous (and often mall-bound) bookstore chains are long gone, independent booksellers in many cities, including Seattle, continue to thrive.
As reported by Reuters, Amazon Books, 4-Star, and Pop Up locations will not close all at once and instead will be shuttered in a rolling manner depending on location. It is unclear how many employees will be impacted by the 68 store closures.
“We remain committed to building great, long-term physical retail experiences and technologies, and we’re working closely with our affected employees to help them find new roles within Amazon,” said Amazon spokeswoman Betsy Harden in a statement shared by the New York Times.