Amazon is planning to open department stores: Could Amazon push again into the physical retail space with its new e-commerce platform?
The tech giant plans to open several significant physical locations similar to department stores, reports The Wall Street Journal.
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According to “people familiar with this matter,” the report stated that the new spaces would span 30,000 feet and carry top-brand items. The report indicated that department stores usually take up 100,000 square footage.
Amazon stated in an email to USA TODAY that it does not comment on speculation and rumors.
Amazon, a Seattle-based company, has tried physical stores before. Amazon Go is the grocery store that allows customers to pick up a cart and shop. Then, they can leave using an app that manages their orders.
Amazon has also experimented with physical books stores, and in 2017, acquired Whole Foods for $13.7 billion.
Last year, Simon Property Group, the nation’s largest mall operator, reportedly talks with Amazon to convert former Sears and JCPenney stores into distribution centers.
Although there have been signs of decline in department stores, Amazon’s reported move makes sense, according to Neil Saunders (Managing Director of GlobalData).
Saunders stated that too many people had forgotten the basics of retailing and neglected basic shopkeeping and merchandising. “Against this background, Amazon’s latest venture into physical retail makes sense,” Saunders said.
The shops will likely be smaller than larger department stores. They will be located in areas with high footfall rather than failing malls.