Maybe Amazon is Not the Future of Retail

Amazon is a beast and is sure to take over top spot from Walmart in the coming years as America's biggest employer. However, it may not have a great physical future of Retail. In fact, Alibaba and JD.com have done much better in China in physical retail while mirroring them in the future of logistics.

Amazon certainly seems to have failed in physical retail. Amazon is shutting 68 retail stores, ending Amazon Books, 4-star and Pop Up shops. Even as it turns some of its Whole Foods storts into cashierless tech with Amazon Go Technology.

Whole Foods has been pretty much a complicated disaster for Amazon. Over the years, the e-commerce giant has launched an array of brick-and-mortar concepts, from supermarkets to retail stores featuring Amazon-branded electronics and top-selling products that it sells online. I think it's safe to say it has tried physical retail and mostly disliked and been able to perform as an old-school retailer. It's a bit like Google trying to do E-commerce, just something feels a bit off.

I want to write an obituary for Amazon Book stores, but I just feel nothing about it. When I think of Amazon workers, I mostly think of warehouse workers getting injured and being unable to unionize by pressure from Amazon. I think of people getting fired for speaking up about unhealthy working conditions. I think of the dreary future of America's future of consumer based capitalism.

The sad (not so sad) news of the death of Amazon's physical retail experiments is news that was first?reported?by Reuters.?The closure dates, which are unspecified, will vary.

But sales growth of the physical stores unit has noticeably lagged the company’s overall retail business. This is not a company that tolerates medicrocy well, even though its sad foray into grocery was misguided in the extreme. Even though its founder flounders over a Space tech company that he can barely get off the ground. (BlueOrigin).

Amazon is rethinking its retail ambitions after years of expansion. Amazon's Gaming Studio has more or less failed as well in recent years, Amazon is failing in a lot of areas if you haven't noticed or been paying attention. But it's core E-commerce and AWS business is so strong, it hardly even matters. However, Amazon is not the future of retail.

The company’s more than 500 Whole Foods Market stores and two dozen Amazon Fresh grocery stores will remain open. I really have no idea what it plans to do with Amazon Go technology, which once felt like a splashy thing from the future.

The company opened its first physical bookstore in November 2015, and its first 4-star outlet in September 2018. Both represented experiments in combining Amazon's online shopping data with the retail world — the in-store selection reflected what was popular or likely to sell. It's not certain how well they fared in practice, but it's safe to say they weren't as disruptive as Amazon's internet-based book sales. I used to care about covering the future of Retail. But I realized a lot of the secor is in denial about digital transformation. Chinese Super-apps give their consumers convenience we'll likely never see in America or Canada.

The move sheds businesses that failed to gain traction for the internet giant, which has tried for years to compete in brick-and-mortar retail without finding a breakthrough hit. I'm not going to cry about costly failures for Amazon, who have lost a bit of their luster in recent years, even while refusing to do a stock split that makes their stock even remotely affordable. Amazon's stock price is over $3,000, it's absurd.

Amazon 4-star stores, which are mall-based,?carry items from some of the most popular categories on Amazon.com. Everything in the store is rated four stars and above, is a top seller or is new and trending on Amazon.com. The format?made its debut?in fall 2018, in New York City. It as a pretty dumb concept, to put it mildly.

The closures affect 68 stores across the U.S. and U.K., Amazon said. American remains pasted with too much costly retail physical space we've forgotten exists or even care to visit even in a post-covid awakening of Spring and Summer, 2022.

Amazon's performance in physical retail have been dismal, let's just admit it. Company filings show sales in its physical stores have shrunk. In 2018, the first full year after Amazon bought Whole Foods, its physical stores had more than $17.2 billion in sales. Last year, that fell below $17.1 billion. (Those figures do not include online sales for grocery delivery and pickup.) The company doubled its overall sales over that same period.

So much of Amazon's attempts at hybrid stores are sort of weird experiments coming a bit out of left field. Amazon has been toying with brick-and-mortar stores since it opened its first bookstore in 2015 in its hometown, Seattle. At the time, rumors that the company was setting up its own store sent reporters?scrambling?to dig up blueprints. Over time, Amazon opened bookstores in 13 states. From Amazon Go to Book Stores, it all felt a bit retro or back to the future.

Amazon has a bloated share of America's E-commerce sales. Its pursued an aggressive advertising business now and sealed its fate in the Cloud. It can leverage logistics and perhaps even EVs if it chooses to acquire Rivian one day. Amazon Prime is still a winner and it had a good future in Entertainment streaming with Prime Video. Amazon needs to pick its battles better, because even Amazon can't win them all.

Amazon?declined to say how many employees would be affected by the closures. If you are work at Amazon, you are a replaceable cog in the wheel. At some times of the year, about 1 out of every 153 American workers is an Amazon employee. It's just sad. Amazon is not the future any longer. It's just another guy on the street trying to peddle its business. It's losing more than its winning now and it's so rich it doesn't even matter.

More people work for Amazon than are employed in the entire residential construction industry, and it's not even a good thing for America or American consumerism. It demonstrates a race to the bottom of the quality of American jobs. It paid its median employee in 2020 - $29,007. Try living on that with inflation. America is not the future of retail.

Thanks for reading!