All the stores will be closed by the end of April.
Amazon is closing all of its 87 “pop-up” stores, the Wall Street Journal reported on Wednesday.
The stores, which mostly operate as small kiosks in malls, Kohl’s department stores, and Whole Foods locations, have been part of Amazon’s retail strategy since 2014. Ailing malls, many of which have lost “anchor” retailers in recent years, have benefited from the kiosks, which sell Amazon-branded tech like Alexa speakers and Kindle e-readers and bring in much-needed foot traffic. (The “mallpocalypse,” as it’s been dubbed, is largely due to the rise of online shopping — something Amazon has obviously played a huge part in shaping.)
Just one day before the news broke that Amazon’s pop-up concept is ending, the Journal reported that these stores helped “draw the right crowd of shoppers” — i.e., those with money to blow — to malls. In other words, Amazon has become the new “anchor” retailer that drives traffic to smaller shops. “When Amazon comes knocking, it feels like Apple has showed up,” Jay Luchs, the vice chair at the real estate consulting firm Newmark Knight Frank, told the paper. Now those stores are closing; Amazon reportedly plans on shutting them all down by April 29, even though some opened as recently as this year.
Amazon’s plan to shutter these stores shows just how much power it has over malls and other retailers, which both compete with and now find themselves relying on the tech giant. It also highlights a key difference between online shopping, especially on Amazon, and shopping at a brick-and-mortar store: the discovery factor.
In-store shopping gives you a degree of spontaneity that isn’t always available online; you can walk in planning to buy one thing and walk out with a bag full of new items you wouldn’t have otherwise seen or thought to purchase. (According to the Journal, the kiosks mostly sold Amazon-branded electronics.) When people order products through Amazon, on the other hand, they generally search for one particular thing and eventually choose which variation of it to buy from a list of algorithmically generated results. The order in which products are shown relies on a combination of ratings and sponsorships, which can have a homogenizing effect on what people buy.
“[The algorithm is] basically pushing customers to always buy the top few products,” Ted Lappas, an assistant professor at the Stevens Institute of Technology’s School of Business, told me in December 2018. “People never get to look at item six, or 16, or 20.”
It’s possible to browse for products on Amazon, but the things you’re shown are still determined by a combination of what you’ve bought and searched for in the past, what’s “trending” among shoppers like you, and sponsored products. All of this reduces the possibility of discovery that is a hallmark of IRL shopping. This mindset — giving the customer what they want and showing them what they don’t know they want but are algorithmically predisposed to buy — is a key part of Amazon’s retail strategy, which is expanding even as its pop-up stores close.
According to the Journal’s report, Amazon plans on expanding its bookstores, where books are sorted into groups like “most-wished-for books on Amazon.com,” as well as its “4-star” stores, which only sell products that, as the name would suggest, have a rating of four stars or more on Amazon’s website. These stores mimic “not just what customers are buying but what customers are loving,” Cameron Janes, Amazon’s vice president of physical retail, told The Goods’s Chavie Lieber last September.
In other words, Amazon isn’t just changing where and how people shop — it’s also increasingly influencing what we choose to buy in the first place. The tech giant may be closing a few dozen mall kiosks across the country, but this move signals growth, not stagnation, for the company.
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Breaking News: Amazon kiosks helped bring foot traffic to struggling malls. Now they’re all closing. - News Paper
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