The Rise And Fall Of Amazon Retail

What was originally an online bookstore has turned its founder into one of the richest men on Earth (or space, thanks to Blue Origin!). There's no debating Amazon's presence in our culture today. Shoppers expect fast, easy, and most importantly, undetectable service in every part of their experience. But, while their rise to the top may have been meteoric, it seems even Amazon can fly too close to the sun.

A little over a month ago, Amazon announced they would close all 68 of their retail stores, except for their Amazon Go, Amazon Fresh, and Whole Foods locations. The online retailer, which famously bought Whole Foods in 2017 for a whopping $13 Billion, seems to be setting up for a new era of retail. But, it seems like this decision was made at the last minute, as Amazon Books and Amazon 4-Stars were still being built when this decision was announced. Five locations were “scrapped” due to the closures, three of which were in newer markets for the brand. Before this announcement, Amazon operated:

While Amazon may be closing some of its doors, they're certainly not done with retail yet. Before announcing the “Books” and “4-Star” closures, they announced a new store experience, called Amazon Style. “Style” will focus on clothing and accessories, but with a twist. Instead of stocking the front of the store, “Style” will use QR codes and other monitoring tech for shoppers to engage with products. The first store is already being built at the Americana at Brand in Glendale, California.

What's Next For Amazon's Retail Strategy?

This new era of Amazon brings up a lot of questions about what they plan on doing next. Amazon Go is well known for its cashier-less grocery/convenience store experience. Its technology allows customers to scan their Amazon app and “Just Walk Out” with their items automatically paid for. While Amazon Go may have been the first to introduce this tech to the world, they certainly aren't the last. Other grocers, like Albertsons and Kroger, are beginning to implement similar tech - like “smart carts” - into their stores. Others like Fry's have been using robots to deliver smaller orders to local customers. Even universities, like my alma mater Arizona State University, have launched programs with the same robots for on-campus students to order food from. (Go Sun Devils!)

Grocery Stores have been booming for the past few years, so growth and innovation in the category isn't surprising. Taking a look at where Amazon is setting up shop, they keep it pretty straightforward with “Fresh” stores in only a few major cities:

Los Angeles is by far Amazon's largest market, especially when considering the amount of Whole Foods locations. Since these locations are among the first for Amazon's new technology, the decision makes sense. With this new direction in their retail strategy, Amazon appears to be planning for more densely populated areas - and therefore high densities of Amazon Prime users. Only time will tell how Amazon Fresh and Amazon Go will fare, but while we say goodbye to some Amazon stores, it seems like they're just getting started. •

Last Modified May 6, 2022