Jeff Bezos, CEO of Amazon, may have just found out, that he too, can’t make retail all better. A business friend of mine, Rob Stott, an editor at Dealerscope, a tech trade publication, just discovered in a recent Amazon sales report, that “its physical stores reached $4.4 billion during the fourth quarter, a 3 percent sales decline from the $4.52 billion they did last year during the same period.”
According to Stott, that 3 per cent figure includes sales at the company’s Whole Foods locations as well as its other physical stores like Amazon Go and the Amazon Bookstore locations that have been popping up around the country.
Amazon’s overall quarterly earnings report did have a lot of positive news. Sales are up 20 percent year-over-year, ending at $72.4 billion for the quarter.
Stott read the entire report and found the one little item that gave him a chuckle. “For what it’s worth, physical stores represent a tiny segment of the business that Amazon does as a whole. But the blemish they left on what was otherwise a pretty solid quarterly earnings report shows that even big, bad Amazon is at least somewhat struggling to find a way to make brick-and-mortar work for them. And while they’ve been busy expanding their physical retail presence, competitors are quickly catching up on the ecommerce side of the business.”
Thanks Rob for clueing us in. It’s nice to know that Amazon may be forced to figure out how to make traditional retail stores popular again.
Here is Rob’s story in Dealerscope.
I said it the other day, and now I say it again today. The retail world is changing. It has to. Traditional retailers cannot compete with online merchants.
Therefore, Nordstrom has opened its first store without inventory, called Nordstrom Local. The 3,000 sq. ft. store, the first one located in West Hollywood, CA., just features a few dressing rooms. The average Nordstrom store used to be 140,000 sq. ft.
The smaller Nordstrom store features personal stylists, beverage bars, salons, and alteration sections.
Nordstrom likes these convenient locations because they can provide better customer service like same-day alterations and convenient pick-ups for purchases and returns.
Nordstrom is still figuring out the correct retail concept for the future. I think they are getting very close.