- Amazon is planning to open department stores, according to The Wall Street Journal.
- Sources say these stores will sell a mix of furniture, clothing, and electronics.
- The e-commerce giant has been doubling down on its brick-and-mortar business in recent years.
Amazon is opening department-store-style shops in the US, according to a Wall Street Journal report.
Sources familiar with the matter told The Journal that the e-commerce giant will open several large retail locations in Ohio and California. These stores, which are expected to be around 30,000 square feet, will be smaller than department stores but offer a similar assortment — furniture, clothing, and electronics, for example. There will be a strong focus on its own-brand goods too, sources said.
A spokesperson for Amazon declined to comment when contacted by Insider.
Amazon has leaned into its brick-and-mortar business in recent years – opening books, electronics, and grocery stores, including Amazon 4-star and Amazon Go.
But this new-style store would enable it to make a bigger push into apparel, an area of its business that it has been doubling down on.
Earlier this year, Amazon unseated Walmart to become the leading apparel retailer in the US. According to Wells Fargo, the company now has a 30% to 35% share of the online apparel and footwear market.
It’s also making roads into the luxury fashion industry, though with less success. Last year, it partnered with Oscar de la Renta to launch its “Luxury Stores” – high-end fashion storefronts on its site.
“Stores will help Amazon do a much better job of showcasing its offer, especially in own brand, and encourage consumers to engage more,” Neil Saunders, managing director of GlobalData Retail, said in an email to clients on Thursday.
“Other direct-to-consumer brands have been actively moving into physical retail and it makes sense for Amazon to do the same, albeit with a wider array of products,” he said.
But the news of Amazon’s new stores only puts extra pressure on legacy department store chains in the US, which have been struggling for years as customers have shifted online.
Saunders pointed to Kohl’s in particular, which has a partnership with Amazon to enable its customers to make online returns in its stores. Amazon may now choose to do these returns in its own locations, he said.
But mostly “the lack of innovation by traditional department stores means their defenses are very weak so the last thing they need is to fend off a new invader to their space,” Saunders said.