Why is Amazon Opening Physical Stores While Everyone Else is Closing Them?

With all the recent talk about online shopping displacing going to brick-and-mortar outlets, some people might question why the company largely responsible for spurring this shift, Amazon, is so interested in expanding its reach in the physical store realm.

Amazon currently has a number of brick-and-mortar projects in the works, even as retailers like Kohl’s and Macy’s shut down hundreds of stores and forecasts indicate that one third of American malls are likely to close. Last year, Amazon opened its first bookstore in Seattle, and this week they announced a new grocery store without checkouts known as Amazon Go. Additional bookstores are expected in several big cities, while other plans include convenience stores, shopping mall pop-ups to showcase its connected devices, and drive-through grocery stores.

Consumers Want to Feel, See, and Touch

Marketing is one big driver of these efforts, with the pricing strategies used at its first bookstore aimed at drawing consumers into their ecosystem, particularly its Prime service and devices like the Kindle.

Another draw of physical retail outlets is giving consumers the ability to see, touch and feel the items they are considering buying. A recent survey of more than 2,500 Americans found that two thirds of shoppers who prefer buying items online rely on a physical store before or after making their purchase. For example, they might visit a store in person to see an item before ordering it online, or they might choose to order clothes from a retailer with an outlet in their local area in case they end up needing to return something.

Therefore, retail’s shift to omnichannel not only means that physical retailers need to go online but that online retailers also need to establish a physical presence. Amazon might not have as much experience as its competitors in physical retail experience, but the company has had few failures in its rise to the top and doesn’t seem likely to flounder in this effort.

This blog post was based off of an article from Retail Dive. View the original here.

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