Amazon has plans in the works to launch several brick-and-mortar retail locations that will operate similar to department stores. They will likely roll out initially in Ohio and California, The Wall Street Journal reported on Thursday (Aug. 19), citing sources.
The move is intended to expand Amazon’s footprint in retail sales of clothes, home goods, electronics and more, sources told the WSJ.
At first, the physical Amazon retail stores in Ohio and California will average about 30,000 square feet, which is a fraction of the typical 100,000 square feet that department stores typically occupy, the report noted. Incidentally, many big-name department stores have reduced their physical footprint.
Top brands will be on the shelves, although names were not dropped, the sources said. Amazon’s own private-label merchandise — everything from clothing to furniture — is anticipated to be front and center, although the strategy is still in the works and the plans are not finalized.
Amazon is now the leader in U.S. clothing sales, pushing Walmart out of the top spot, per data from Wells Fargo & Co.
The demise of department stores and other retail outlets has in the past been blamed, in part, on Amazon and other online discounters. Many retailers have downsized their physical footprint, gone all-digital or closed shop.
About 25 years ago, department stores had 10 percent of all retail sales, minus cars, gas and restaurants, WSJ reported, citing data from Customer Growth Partners. So far in 2021, the sector doesn’t even have a 1 percent market share.
But industry experts aren’t taking their bets off department stores yet, per the report. Macy’s and Kohl’s are anticipated to post robust sales on Thursday (Aug. 19). “People are absolutely returning and shopping in department stores,” Capri Holdings CEO John Idol said last month.