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Amazon's Foray Into Department Stores Could Breathe New Life Into Segment: Analysis

Published on Aug 20 2021 8:19 AM in Retail tagged: Trending Posts / Amazon / GlobalData / Department Stores / Paywall

Amazon's Foray Into Department Stores Could Breathe New Life Into Segment: Analysis

The decision by Amazon to open large physical outlets – akin to department stores – in the US could generate some impetus in a segment that has been lacking innovation, an industry analyst has suggested.

Neil Saunders, managing director of GlobalData, was commenting following reports that Amazon's first department stores are set to open in Ohio and California in the coming years, although no date has been set.

These stores will occupy a space of around 30,000 square feet, smaller than a typical department store of around 100,000 square feet, the Wall Street Journal reported.

"Amazon’s rumoured move into opening department stores may seem odd," Saunders commented. "After all, it has long been said that the department store format is dead. And given the chronic underperformance of US department stores, which have seen their share of overall retail slip from 14.5% in 1985 to about 2.9% today, such a narrative is not misplaced."

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