Amazon plans to open department stores in the US: WSJ

Amazon is planning to open large physical retail stores in the United States that will function as departments stores and sell a variety of goods including clothes, household items and electronics, people familiar with the retail giant’s plans told The Wall Street Journal (WSJ) on Thursday.

The e-commerce firm’s first physical stores are expected to open in Ohio and California, and will be about 2,787 square metres (30,000 square feet), similar in size to Bloomingdale’s and Nordstrom department stores, WSJ said in an exclusive report.

It is not yet clear what brands the company will offer at its brick-and-mortar shops, although its own Amazon label, which makes products ranging from clothes and furniture to batteries and electronic devices, is expected to feature prominently, the sources said.

Amazon has dominated the online shopping space in recent years and has previously experimented with stores that sell books and groceries in several US states including California, Colorado and Washington. It acquired grocery company Whole Foods in 2017.

Last year, Amazon witnessed a surge in business and online purchases from American shoppers who went online for household products and groceries. Business boomed as COVID-19 forced millions indoors.

With the reported plans to expand into the brick-and-mortar space, Amazon will join an arena that it itself has helped reshape.

In recent years, many department stores, malls and mom-and-pop shops have shuttered their doors as consumers moved to search for better deals online.

Founded in 1994 as an online site selling books, Amazon approached some US apparel brands about two years ago with the idea of opening large stores that would sell its own products, a person familiar with the move told WSJ.

Amazon executives believe that physical stores could help attract new customers and provide a space that will showcase the firm’s devices and products, a person familiar with the matter said.

That can also help customers try on clothes and familise themselves with the various goods Amazon sells, the source added.

In recent years, department stores were hit hard by discounters, fast-fashion brands and e-commerce.

Troubles worsened in 2020 as the coronavirus pandemic and the subsequent lockdowns and restrictions further punished brick-and-mortar retail.

JCPenney, Neiman Marcus Group Inc, Lord & Taylor and Stage Stores Inc have all filed for bankruptcy. Some have found new buyers and were able to see another day while others were liquidated.

But chains like Macy’s and Kohl’s are expected to bounce back as American shoppers restock their closets after reducing clothing purchases last year. Both crushed second-quarter earnings estimates on Thursday.