Amazon to Close 68 Physical Stores

Bookstores, 4-star and pop-up shops lose out to grocery and Amazon Go endeavors.

March 04, 2022

Amazon Books Store

ALEXANDRIA, Va.—Amazon is shuttering all 68 of its brick-and-mortar bookstores, pop-ups and shops in the U.S. and U.K., reports Reuters.

Amazon said the move will allow it to focus on its grocery stores, Amazon Go convenience stores and a department store concept. The company’s physical store revenue was just 3% of its $137 billion in sales last quarter, and most of the revenue was from Whole Foods Market.

Amazon’s brick-and-mortar book shops were as bad of a match as Tesla opening gas stations, Michael Pachter, an analyst at Wedbush Securities, told Reuters.

Last year, Amazon announced it would open Whole Foods stores equipped with Just Walk Out technology. One of the locations recently opened in Washington, D.C.’s Glover Park neighborhood, and the 21,000-square-foot store, and the “Amazon-ification of the grocery chain is physically complete,” according to the New York Times.

Amazon’s Just Walk Out technology works by a combination of computer vision, sensor fusion and deep learning. Amazon equated it to what you’d find in a self-driving car. When shoppers arrive at the store, they can choose if they want to shop using Just Walk Out technology or the self-checkout lanes. If they choose the technology, they enter the store in three ways: by scanning the QR code in the Whole Foods Market or Amazon app, hovering their palm using Amazon One or inserting a credit or debit card linked to their Amazon account.

Ninety percent of people used unattended retail as much as they had prior to the pandemic or more during the pandemic, and more retailers are exploring ways to eliminate friction for customers, including skipping the checkout line. Choice convenience stores in Denver offer self-checkout, walkout technology and an app, which all sync and communicate with each other. Additionally, Choice Market and St. Louis-based Health Hospitality Partners have partnered to create the first autonomous markets in a health-care setting.

Amazon’s cashierless Amazon Go stores, however, are not seeing the growth that was originally planned by Amazon. Four years later after opening the first Amazon Go, there are only 24 stores, far short of the 3,000 the company was looking to open by 2021, according to a Bloomberg report after the initial launch. Because many of Go locations are in dense, urban areas, aimed at busy office workers during their lunch breaks, the pandemic ceased much of the foot traffic in the stores.

Although Amazon plans to open Go stores in the suburbs, former Amazon employees told CNBC the overall grocery strategy has moved further in the direction of bigger stores and away from Go marts.

Last month, Business Insider reported that Amazon has considered selling gas at Go convenience stores, along with lottery tickets and pharmaceuticals. The company has reportedly acknowledged that selling fuel could bring risks, including a potential conflict with its various climate initiatives.