Commentary

Amazon Dismantling Its Pop-Up Stores, Expanding Other Retail Concepts

It’s only natural that what pops up must come down. Why then, does it seem surprising that Amazon has decided to close all 87 of the Pop-Up kiosks it has opened across the country during the past few years?

“The closings are expected by the end of next month, some employees at Amazon pop-up stores said,” writes Esther Fung, who broke the story yesterday for the Wall Street Journal. The kiosks “typically occupy a few hundred square feet of space and showcase devices like voice-assistant speakers, tablets and Kindle e-readers. They feature staff, dressed casually in black Amazon T-shirts, who encourage passersby to sample the newest products,” Fung reports.

advertisement

advertisement

Amazon confirmed the impending shutdown.

“After much review, we … are instead expanding Amazon Books and Amazon 4-star, where we provide a more comprehensive customer experience and broader selection,” a spokesman said.

“In September 2016, Amazon said it would open as many as 100 pop-up stores in the U.S., after a pilot program of six such stores in 2015 proved successful enough to encourage the company to sell more goods in Amazon-branded spaces,” Kevin Kelleher reports for Fortune.

“Amazon’s pop-up stores began appearing in shopping malls, Kohl’s and grocery stores including the Whole Foods stores Amazon bought in 2017, eventually planting a retail presence in 21 states," Kelleher continues.

The Amazon Books retail stores that the company will now focus on “look like a traditional bookstore when you enter but have a good chunk of space devoted to both Amazon products and third-party offerings that work in conjunction with the Echo smart speaker, like smart lights and security cameras,” Jefferson Graham writes for USA Today.

“The 4-star stores have a deeper product portfolio, including toys, games, home and kitchen goods, electronics and Amazon devices, the company said. Amazon has just a handful of 4-star stores currently open, in New York; Berkeley, California; and Lone Tree, Colorado, while there are 20 Amazon Books stores across the country, including Los Angeles, Boston and Washington,” Graham adds.

Also, “about a year ago, Amazon opened its first cashierless convenience store, Amazon Go, which uses sensors and cameras to track what shoppers buy so they do not need to check out. It now has 11 around the country. In December, the company revealed a small-format Amazon Go, selling grab-and-go food, that could operate like an enclosed kiosk in an office lobby or an airport,” Karen Weise writes for the New York Times.

“Amazon’s stores, including Whole Foods, brought in more than $17 billion in revenue last year. In the fourth quarter, they were the only financial segment of its business that posted a decline in revenue from a year earlier, though Amazon said that was partly due to how the company reported Whole Foods purchases made online,” Weise adds.

“In a conference call after Kohl's most recent earnings report, CEO Michelle Gass told analysts that its Amazon pop-ups will shift to a more traditional wholesale model,” Dennis Green writes for Business Insider.

“It was an experiment and one of the things we're really driving in the culture these days is trying lots of things, so we tried the shop in the shop idea and... we’re actually seeing great results through a wholesale relationship,” Gass said.

“I don’t think it is a coincidence that Amazon is closing its pop up stores and going much bigger with Kohl’s which has parking galore,” tweeted CNBC “Mad Money” host Jim Kramer.

“Recent reports suggest the company is set to embark on a major grocery expansion. And at the same time, construction actively suddenly restarted at a vacant retail site in Seattle that has long been linked to Amazon,” Nat Levy writes for GeekWire.

In other words, Amazon is making strategic redeployments, not suffering a defeat.

“The pop-up stores were designed to ascertain demand, and Amazon can leverage that data for prototypes of other stores,” Charles Lanier, director of real estate at Plaza Associates Inc., a private commercial-property landlord that operates Crabtree Valley Mall in Raleigh, N.C., which contains an Amazon pop-up, tells the WSJ’s Fung. “Amazon is innovating at a fast pace, he said, adding, ‘We’re big fans of the brand.’” 

If you can’t beat ’em, cajole them.

Next story loading loading..