By Anne D'Innocenzio
Amazon is confirming it's closing all of its bookstores as well as its 4-star shops and pop-up locations as the online behemoth reworks its physical footprint.
The Seattle-based company said Wednesday that the move, which affects 66 stores in the U.S. and two in the United Kingdom, enables it to concentrate its efforts on Amazon Fresh, Whole Foods Market, its convenience concept called Amazon Go and its upcoming Amazon Style stores. Amazon Style, which will sell fashion and accessories, is set to open in a Southern California mall later this year.
The store closures will also allow it to focus on expanding its physical retail technology, the company said.
Amazon opened its first brick-and-mortar bookstore in 2015, two decades after it began selling books online and helped drive a number of shops out of business. Amazon's 4-star shops, which first debuted in 2018, carry a limited selection of best-selling products from top categories that Amazon.com sells including devices, consumer electronics, toys and games.
The move comes as Amazon.com Inc.'s overall revenue growth is slowing, and it's looking for new ways to reignite sales.
But Neil Saunders, managing director of GlobalData Retail, said the strategy comes as a surprise and is an acknowledgement that the book stores weren't delivering the returns Amazon was looking for.
Saunders did note that the main problem with Amazon’s non-food stores is that they lacked a real purpose even though the merchandise was well-presented.
“They were designed for people to pop in and browse rather than as destinations where people would head on a mission to buy something,“ he wrote in a note on Wednesday. “Ultimately, this wasn’t great for driving footfall — especially in an era where people are visiting shops less.”
Saunders added that the other problem is the assortment which, in many locations, was disjoined and unfocused.
The news was first reported by Reuters.
