Amazon Shutting Down 87 Pop-Up Stores

Ending a five-year experiment, Amazon is shuttering its pop-up stores while bolstering other brick and mortar efforts.

Photo by Richard Levine, Zuma Press

Amazon is closing its 87 U.S. pop-up stores, according to the Wall Street Journal. The shops are located in places like malls and Whole Foods stores and will be closing by the end of April this year. Amazon  is terminating this five-year experiment, while expanding its brick and mortar efforts such as existing bookstores, cashier-less convenience stores nd 4-star stores, and launching its new line of grocery stores.

The pop-up stores currently take up a few hundred square feet of space. The stores showcase devices like voice-assistant speakers such as Alexa, tablets and Kindle e-readers. The staff are dressed casually in black Amazon T-shirts and encourage people walking by to sample the latest products.

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Amazon Opens New 4-Star Store in Soho

Featuring some of the most popular items rated 4 stars and above from its website, Amazon’s new 4-Star Store in Soho, NY ties into its bestselling Amazon Prime deals.

Image via Amazon

As its name implies, Amazon’s new 4-Star Store features top-rated products that have four stars or more in online reviews. The new store that opened today, is stocked with a selection of consumer electronics, kitchen and home items, toys, books, games, and more that have four star ratings or higher.

Further cementing its entry into brick and mortar retail, Amazon’s newest store lowers risks associated with retail sales by showcasing popular products in demand. The store also offers avenues for discovery, going beyond merely stocking most-loved items on Amazon.com, by organizing products into specific categories such as Most-Wished-For, Trending Around NYC, Amazon Exclusives and more.

Prime Benefits

Prime members benefit from Amazon primes while non-Prime members have to pay manufacturer’s suggested retail prices (MSRP). The price tags show both prices, thus reinforcing how much Prime members save.

Showcase Amazon Products

The new store also offers Amazon another avenue to showcase its own products. Customers can play with Amazon Echo and other Amazon devices that they may not have viewed in person before purchasing the items on Amazon’s website.

Amazon’s foray into brick and mortar stores has been strategic and has expanded in recent years. The company’s purchase of Whole Foods brought instant access to hundreds of stores in the United States and boosted Amazon’s entry into one of the largest and most important consumer markets - groceries and household items. The company also has other stores - select bookstores that sell only the most popular books and the innovative cashier-less Amazon Go stores that first launched in Seattle in December 2016.

Amazon Go - Checkout Free Customer Convenience

Image via Amazon

Without checkout lines, cashiers and registers, Amazon Go lets Amazon customers just get the items they want and leave. Their Amazon accounts are charged afterwards. Amazon Go stores are monitored by video cameras that track your activity.

As a customer, when you enter the Amazon Go store, you start by scanning an app. As you shop, the sensors in the store identify the items in your shopping cart and then charge them to your account when you leave. While the Amazon Go store initially opened to employees in 2016, public versions opened in 2017 in Seattle and Chicago. Over 3,000 Amazon Go stores are expected to launch by 2021.

The convenience for the consumer is obvious as you do not have to wait in line or try to figure out self-checkout machines that often fail to register items smoothly. Amazon benefits too as the company can track your purchasing behavior through the store and see items that you may have been interested in, prior to your final purchase decision. This would increase the recommendations the company would in turn offer you online.

Image via Amazon

Amazon Go stores stock popular items that you would find in any local store such as snacks, sandwiches, salads, milk, bread, drinks and more. Some of the stores also feature meal kits by Amazon similar to Blue Apron delivery and also a selection of wines, beer and other alcohol. By offering quick service fresh items with an easier and faster checkout experience, Amazon Go can threaten existing businesses and convenience chains ranging from 7-Eleven Inc, Subway and Panera Bread to food delivery trucks and mom and pop stores. The challenge to growing this new high tech chain of stores however is the high cost of hardware per store.

Amazon’s interest in expanding its reach via brick and mortar stores is strong but the company remains committed to only doing so if they offer something new, instead of just repeating what already exists in this competitive and popular consumer market space.

“Our focus is on customer obsession rather than competitor obsession, eagerness to invent and pioneer, willingness to fail, the patience to think long-term, and the taking of professional pride in operational excellence.”

— Jeff Bezos, CEO in Amazon shareholder letter

Some of the world’s greatest companies can attest to this. By putting the customer first, successful brands become synonymous with excellence and drive customer engagement and loyalty.