What happened — Amazon apparently wants to become a Walmart, disclosing plans to open large departmental stores, in a renewed focus to win offline-commerce for its newest act. Folks watching them closely are barely surprised!
BTW, Amazon already owns 500+ offline mega-marts via Whole Foods, an organic food supermarket the company bought in 2017 for $13 billion. Not to forget the Amazon Go stores (automated, checkout-less) with ~30 locations.
So why the move — first, although Amazon rules ecommerce, it barely owns 3% of all global retail. Certain offline-heavy categories like furniture, clothing, grocery, still have plenty of room for growth.
Second, Amazon’s dominance is challenged by Walmart and other offline big box retailers, who are building robust ecommerce operations inside of them, and offline locations can add a whole new dimension to Amazon’s capability to fight the war. Besides, offline stores can also double up as delivery and logistics hubs.
Lastly, Sunday-evening grocery runs are great opportunities to upsell users on more “impulse” purchases.
Big picture — future of retail is omnichannel, where big companies find an ideal middle ground between online and offline, capturing maximum economies of scale.
If you find this sexy (like we do, sorry) do grab a copy of Sam Walton’s biography! And thank us later.