Amazon.com Inc. explored retail store opening stores that sell a mix of household goods and electronics, a potentially significant increase in the company’s growing portfolio of brick and mortar properties.
Stores would carry unsold goods residing in Amazon warehouses at exorbitant prices, according to two people familiar with the plans. The company is considering opening more permanent stores, as well as shopping malls or parking lots, people say. These plans were the first of its kind and were discussed last year, but the new intoxicating epidemic and new ones forced many workers to focus on day-to-day operations.
“It’s a way to clean up storage areas, and to go into inventory without destroying it,” said one of the people, who was briefed on the plans but was not authorized to discuss them. “It’s in line with Amazon’s price proposal, keeping prices up and allowing customers access to products at a lower cost.”
Amazon declined to comment.
In its quest for tremendous growth after reaching the point of control in many online retail categories, Amazon has built a major brick-and-mortar operation over the past several years, starting with a series of bookstores, which began in 2015 in Seattle high-end stores.
Amazon Go, a convenient low-cost store that uses cameras and other sensors to track what consumers are removing from the shelf, was unveiled to the public in 2018. The same is true of Amazon 4-Star, electronics, household goods and toy stores that sell the highest quality pot and the most expensive items. Amazon Fresh started opening stores last year and has been adding new locations to a stable segment.
Amazon today has 96 stores and seven stores under its brand, according to its website. The Whole Foods Market, acquired in 2017, has more than 500 grocery stores.
A potential discount store might look like a 4-Star, emphasizing small items that don’t fit in a lot of space, such as household items, appliances, toys, baby products and kitchen items, people say. The store probably wouldn’t buy the clothes, they say, because carrying too many sizes could cost too many square images.
Opening a discount chain could point the way for traditional retailers ’decades of loading on low-end goods. Departmental stores have long sold stocks such as dollar cents to traders such as Ross Stores Inc. and TJX Cos. Inc. Maxx and HomeGoods stores. Some chains have even started their own discount stores, including Macy’s Inc.’s Backstage, launched in 2015. These sculptors have come a long way in the midst of Amazon’s online-generated conversions, which often occur as savvy consumers also enjoy a wealth of pursuit through the eclectic variety of cheap brand name brands.
Amazon is already selling discounted goods online through a program called Amazon Outlet. Returned and used items are sold on a separate page called Amazon Warehouse. As the company has grown, its sales executives have been encouraged to negotiate with suppliers to obtain the right to return to Amazon’s unsold goods, current and former employees.
“We will have a very good discussion,” said Faisal Masud, a former Amazon manager who helped set up Amazon’s warehouse deals ten years ago, and today runs Fabric, the start of e-commerce. “If it’s not sold, it goes back. The aim is always to get a good return on the acquisition and return of the property. “But despite these efforts, the company is still recovering from many unsold products.
The Amazon store team was inspired to check out the low-end shopping malls in part by the only staff sales held at a warehouse near Seattle’s company headquarters in 2019, where a lot of discounts were sold at a discount to clear space in the area used as a test site for new systems. They also explored the concepts of flash purchases and discount stores, including those at Best Buy Co and a retailer of Recreational Equipment Inc., their leading retail store from the Amazon headquarters, said one person.