The encyclopedia · Strategy & Leadership · Strategic decision · 2015–2022
Amazon closed all 68 of its Books, 4-star and Pop Up stores in one stroke
Amazon's experiment with selling its ratings in physical stores ended on 2 March 2022: 68 stores across the US and UK shut, with 2021 sales below 2018's.
Amazon · 2022-03
What happened
Amazon's brick-and-mortar experiment began with Amazon Books in Seattle in 2015 and grew into three formats: bookstores, Amazon 4-star shops stocking products rated 4 stars and above by its customers, and small Pop Up locations — 68 stores in all, across the US and the UK.
The unit never justified itself: physical-store sales in 2021 were lower than in 2018, noticeably lagging Amazon's overall retail business, which in the same period posted its slowest quarterly growth since 2001. On 2 March 2022 Amazon announced the closure of all 68 stores — every Books, 4-star and Pop Up location, across thirteen US states and Britain.
Amazon kept the formats with a defensible job — Whole Foods, bought for $13.7 billion in 2017, Amazon Fresh, Amazon Go — and pushed ahead with the new Amazon Style clothing stores. Affected employees were offered other Amazon roles or severance. The retailer that had been predicted to conquer malls conceded that a shelf of its own bestsellers was not a reason to visit.
Why it happened
- The concept had no job shoppers needed done: a physical display of online ratings gave no reason to visit that the app didn't already do better.
- The numbers said so for years: 2021 physical sales sat below 2018's while the rest of retail grew.
- Post-pandemic traffic never returned enough to carry formats that had been marginal before.
The lesson
An online bestseller list is not a reason to visit a store. Amazon's 4-star concept gave shelves a sorting rule but shoppers no job, and six years later the whole format closed.
Aftermath
Amazon continued physical retail through grocery (Fresh, Whole Foods), convenience (Go) and the new Amazon Style, with the cashierless technology repurposed across them.
Sources
- CNBC, 2 March 2022 — Amazon closing 68 stores, ending Amazon Books, 4-star, Pop Up shops (all Amazon Books, 4-star and Pop Up locations closing; 68 stores in the US and UK; physical-store sales in 2021 lower than 2018, lagging overall retail; Amazon continuing Fresh, Whole Foods, Go and Amazon Style; employees offered roles or severance)
- TechCrunch, 2 March 2022 — Amazon to close 68 physical retail locations (68 stores across Arizona, California, Colorado, DC, Illinois, Maryland, Massachusetts, New Jersey, New York, Oregon, Tennessee, Texas, Washington and the UK; first physical store in Seattle 2015; Whole Foods bought for $13.7B in 2017; physical retail revenue $4.68B in Q4 2021)
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