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Amazon Announces They Will Soon Open Department Stores

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Amazon Announces They Will Soon Open Department Stores

The Wall Street Journal has reported that Amazon will soon open its own department stores. It has been reported that California and Ohio will see some of the first Amazon departments stores which will take up roughly 30,000 square feet. This size is much larger than Amazon’s other physical locations. However, the predicted size is around the size of a typical T.J. Maxx store and smaller than a traditional department store.

Amazon department stores are a move toward selling more clothing and technology products from top-consumer brands, according to the Journal. This is also an effort to allow shoppers to try before they buy. This is especially useful for items such as apparel which has been an area where Amazon has historically struggled. You can expect to see a showcase of a range of electronics including Amazon FireTvs, tablets, Ring home security range, Luna cloud gaming services, and Echo speakers in the stores.

Neil Saunders, managing director of GlobalData, a research and consulting firm that tracks the retail market has stated, “More stores bolster Amazon’s whole ecosystem and flywheel. They also allow Amazon to gather data and to understand consumer preferences better — understanding that can, in turn, be used to improve the whole proposition.”

What will Amazon department stores do for our shopping centers?

This news has caused a large impact on the retail industry stocks as Bed bath & Beyond, Best Buy, and Target shares fell around 1.5% in premarket trading. If Amazon is to enter the department store world, this would cause a ripple effect on the already struggling retail stores especially including Lord & Taylor, Neiman Marcus, and J.C. Penny who all filed for bankruptcy last year.

Traditional department stores have been under a lot of pressure in recent years, especially due to the pandemic. Department stores helped bring foot traffic to malls, but now these shopping centers turn to restaurants, gyms, and grocery stores to bring more customers to their locations. It is believed that Amazon department stores will likely open in strip centers due to the size of the stores. Nordstrom and Macy’s have been investing in many new ways to bring customers to their stores including opening smaller format stores and increasing online accessibility. Does this mean that smaller, in-person department stores are making a comeback? Mall owners can only hope.

Amazon has recently overtaken Walmart as the world’s latest retail seller outside of China. An Amazon representative has released a statement to CNBC that the company does not comment on speculation and rumors.

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If you are an Amazon seller and require the assistance of an experienced Certified Public Accountant, please contact Ebiz Accounting for an initial consultation. We provide Amazon business accounting services to clients in New York and throughout the United States. All Amazon sellers should have an accountant they can trust. If you are looking to expand your business, or even form a new one, do not hesitate to reach out to our knowledgeable team today.

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