Amazon is reportedly closing all of it’s 87 pop-up stores across the US. The retail giant currently operates various temporary stores, for instance at Whole Foods stores, Kohls stores and shopping malls. In those stores, customers can try Amazon products such as Fire Tablets, Kindle E-Readers, Echo Smart Speakers and Amazon services like Prime Video, Audible and Kindle Unlimited.
Testing New Markets with Pop-Up Stores
Pop-up stores are the forefront when it comes to testing new markets, products or retail concepts with a low financial risk for brands and retailers of all shapes and sizes. The gained learnings and experiences within pop-up stores can be transferred fast and transformed directly into strategic decisions such as converting successful concepts into permanent brand assets - therefore, stores. And exactly this is the case here:
"After much deliberation, we decided to discontinue our pop-up store program, instead expanding to Amazon Books and Amazon 4-Star, where we offer a more complete customer experience and choice," said one Amazon spokesperson.
Brick-and-Mortar matters more than ever
Amazon plans to open new permanent book and 4-star stores to strengthen its stationary presence. In 2017, Amazon made a bold move already, pushing into the brick-and-mortar retail business by buying the grocery chain Whole Foods for $13.4 Billion dollars. With this, Amazon got access to over 460 stores in high class real estate locations. At Amazon's 4-Star Stores, customers can test select products that are sold in the marketplace. Furthermore, around 3000 new branches of the mass-market supermarkets Amazon Go are to be created by 2021. These could increasingly compete with established supermarket chains worldwide. Jeff Bezo's goal is, among other things, to reduce the long queues at the cash registers with Amazon Go, especially at peak times, and thus improve the shopping experience for customers.
Stationary Retail is not dead, it’s changing
In addition, the e-commerce giant is working on a convenience store selling fresh ready meals and a limited selection of food. Last week, it was also announced that Bezos is toying with the launch of a new supermarket chain. The first branch is to open at the end of the year in the West Coast metropolis of Los Angeles. Amazon could also consider buying local supermarket chains, each with around a dozen stores. An opinion from Amazon on these projects does not yet exist. In any case, we got clear proof here that there is no separation anymore between on- and offline retail, addressing customers where they are with tailor made and worthwhile experiences in order to sell.
The consumers ask and we need to deliver
The retail sector is changing, so are the needs of the tenants and the performance spectrum of the commercial real estate. Instead of an asset value, the use value is now the focus, i.e. the performance of a store or commercial space for specific - increasingly short-term - requirements. Thus, the classic Point of Sale becomes the POE - the Point of Experience - and thus the commercial space becomes a stage for marketing campaigns and less the pure sales area for products. The consumer no longer distinguishes between on- and offline, the product or service is purchased where it is easiest for the customer. The acquisition of new customers takes place, for example, in the pop-up store of a brand, because products can be physically and emotionally experienced, but they are bought online later. There is no longer a separation between online and offline, so the tenants of tomorrow are called Amazon, Zalando and Co. - and you.