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A customer carries his shopping bag as she walks out of a newly-opened Amazon Go store in New York.
AP Photo/Mark Lennihan
Where is it all going?
LET'S GET PHYSICAL

Why Amazon is betting on stores

Marc Bain
Member exclusive by Marc Bain for Retail versus Amazon

At the heart of Amazon’s founding was the premise that e-commerce offers certain advantages physical stores just can’t match. Online shops are accessible from anywhere with an internet connection; they’re open 24 hours a day, seven days a week; and they’ve got unlimited shelf space. In his 2018 letter to shareholders, founder Jeff Bezos said if Amazon were a physical store, it would stretch across six football fields.

But Bezos also made two other points in the letter: First, stores are still where most shopping happens. Today in the US, only about 11% of sales are online, and while they’re quickly growing, that still leaves 89% of sales offline. Second, as Amazon gets larger, everything needs to scale with it, including the size of its experiments if it intends to keep generating new ideas. Stores are a project that can work for both. To keep up the fight in retail and find new ways to innovate, Amazon has decided to get physical.

AP Photo/Mary Altaffer
The 4-Star store in New York.