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Amazon, King of Online Retail, Can't Seem To Make Its Physical Stores Work 73

Posted by msmash from the not-so-fast dept.
Amazon's brick-and-mortar expansion has faltered, WSJ reported Tuesday, as the e-commerce giant plans to close its Amazon Go store in Woodland Hills, California, shrinking the cashierless convenience store chain to 16 locations across four states, down from roughly twice that number in early 2023.

The company is pivoting to license its "Just Walk Out" technology, now used by more than 200 retailers including colleges and airports, while focusing its physical retail strategy on grocery stores through Whole Foods Market and Amazon Fresh locations. Amazon's other physical retail experiments, including bookstores and "4-star" locations selling popular website items, have also struggled.
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Amazon, King of Online Retail, Can't Seem To Make Its Physical Stores Work More

Amazon, King of Online Retail, Can't Seem To Make Its Physical Stores Work

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  • But they should be able to sell Mortars in the Middle East and Ukraine

    • Mortars sell better if they include the pestles too.

      • Amazon failed to estimate the difficulties in the Brick and Mordor market, because as everyone knows, "One does not simply walk into Mordor".

        • So the answer was drive-thru? A drive-thru store? So crazy it just might work!

          • Albertson's/Vons/Safeway has that in it's Drive up and Go program. You order online and you can pay to have it doordashed to you or you can drive up to a designated spot and say your are here and we bring your stuff out with or without bags (your choice). Some people just open the trunk of their car and never actually get out of their car, so we load into the back for them.

            • Albertson's/Vons/Safeway has that in it's Drive up and Go program. You order online and you can pay to have it doordashed to you or you can drive up to a designated spot and say your are here and we bring your stuff out with or without bags (your choice). Some people just open the trunk of their car and never actually get out of their car, so we load into the back for them.

              Local groceries had that during the COVID years. I think you can still get it if you pay something like 150 a year for membership. Not a bad deal, I'm just more of a hand-on shopper.

  • Maybe because they're not trying? (Score:3)

    by karmawarrior ( 311177 ) on Tuesday February 04, 2025 @03:27PM (#65141573) Journal

    Amazon isn't trying to make physical stores work for it, it's just trying to create a new type of physical store and see if that works.

    And as far as I'm aware, Whole Foods, its more traditional B&M store, is actually doing fine right now.

    If Amazon simply wanted to do physical stores as a general thing (outside of Whole Foods), they'd do physical stores. They could compete directly with Walmart. They're choosing not to right now, just experimenting with some tech ideas to see if they work. Maybe they're planning something in the future, who knows?

    • Amazon isn't trying to make physical stores work for it, it's just trying to create a new type of physical store and see if that works.

      And as far as I'm aware, Whole Foods, its more traditional B&M store, is actually doing fine right now.

      One vantage hole Foods has, IMHO, is it isn't directly competing with other major grocery stores but has positioned itself as the high end natural store, so tehy aren't in direct price competition with the major players on price or selection.

      If Amazon simply wanted to do physical stores as a general thing (outside of Whole Foods), they'd do physical stores. They could compete directly with Walmart. They're choosing not to right now, just experimenting with some tech ideas to see if they work. Maybe they're planning something in the future, who knows?

      Yea, if they really wanted to big in B&M retail, they could buy Target easily and pickup Kohl's from some spare change; giving them an instant major presence in retail. It would be interesting to see how they could use Amazon and retail store sales data and trends

      • Dude, don't suggest enshitifying Target. It's the only real alternative we have left to Walmart around here, and I specifically pay them a few pennies more per item to *NOT BE WALMART*. If Amazon took them over, they'd go right to the cost-cutting routine and send them into the same murky, can't be bothered to bathe or wear real clothes customer base that Walmart tends to draw.

        • Target would probably be worse under Amazon's leadership, but still not quite as bad as Walmart. The second Walmart felt the political winds changing, they nixed DEI and I also noticed this year that there's no LGBTQ+ Valentine's Day cards in store.

          Of course, the removal of DEI was really just paying lip service to the right wing, so they wouldn't boycott the stores (as if most of that demographic has anywhere else to shop anyway). Walmart still continues to practices its own version of DEI, being willing

        • Target has already enshitified themselves all on their own. They remodeled most of the store into little space wasting boutiques with no brand variety. Except for underwear, clothes are almost all the store brand. That's fine but not for me.

      • It's almost like we need a Fry's Electronics store back and half the store is literally computer parts, components and other random but useful tech-related stuff. A tech superstore! Newegg should of taken over some of the empty Fry's stores. hehe.

        • It's almost like we need a Fry's Electronics store back and half the store is literally computer parts, components and other random but useful tech-related stuff. A tech superstore! Newegg should of taken over some of the empty Fry's stores. hehe.

          I remember Frye's, they used to be teh go to place for computer stuff. They never had decent customer service, and as Amazon and other online retailers grew, there was essentially and less of a reason to go to Fry's unless you needed something right away or they had one of their sales. They had some cool decor at some stores, like Burbank's UFO theme. Additionally, as fewer people built PCs I suspect that hurt as well since it cut into the one thing that differentiated their store from other computer reta

    • Amazon isn't trying to make physical stores work for it, it's just trying to create a new type of physical store and see if that works.

      That is like saying if Tesla made gasoline powered cars that they were not "trying to make IC cars work but a new type of IC car". It sounds like excuses more than anything else. Amazon’s strategy seems to be the only company in the market. They dominate the online space and looking to push everyone out of the brick and mortar business. They currently have the money to take losses for years to gain market share.

    • Re: (Score:3)

      by dgatwood ( 11270 )

      And as far as I'm aware, Whole Foods, its more traditional B&M store, is actually doing fine right now.

      Of course, it's worth pointing out that Amazon bought Whole Foods. Pretty much all they had to do was stay out of the way and let the people who already ran it keep doing their jobs, and it would be doing fine.

      That's a bit different from starting a retail business from scratch.

    • And as far as I'm aware, Whole Foods, its more traditional B&M store, is actually doing fine right now.

      Maybe it's different because I'm in Toronto (over 9M people if you include bedroom communities), but I continue to be flabbergasted at what appears to be the near total lack of integration between Whole Foods and Amazon's gigantic e-commerce platform. I mean it's been nearly eight years, and I still can't order anything online via "Amazon Prime" from a Whole Foods that is only 4km from me.

      Other tha

      • Have you never used Amazon Fresh grocery delivery? At the beginning they shipped all their food from whole foods locations. These days though they have their own dedicated grocery warehouses for Amazon Fresh and their own Amazon branded "generic" food items.
        • Here in Toronto it's just things like dishwasher detergent, peanut butter and oreos - All at staggeringly high prices. So I guess it's different in the lower 48.
    • Truthfully though, Amazon didn't start whole foods. They bought an already well established chain. Pretty much for the sole purpose of starting off their online grocery delivery. If you used Amazon fresh at the beginning all the food was whole foods branded and shipped from your local whole food store.These days they have their own dedicated grocery warehouses for Amazon Fresh and offer a much larger selection that you could previously get from Whole Foods.
  • Ready made for their market.

  • "Just Walk Out"? (Score:4, Informative)

    by R3d M3rcury ( 871886 ) on Tuesday February 04, 2025 @03:58PM (#65141663) Journal

    The company is pivoting to license its "Just Walk Out" technology [...]

    Of course, Amazon has removed it from it's Amazon Fresh stores [gizmodo.com] because it required too many humans to review footage to make sure that things were accurate.

    • Walmart uses humans to pick your order, and bring it to your car so you dont see the peasants. They were smarter about leveraging their resources and foot print. I replaced Costco (and its 1mn daily shoppers) with Walmart curbside pickup
      • I tried that once, got stuck waiting in my car for a full hour for them to bring my order out. Walmart is still shit, they just develop new ways of being shit.
        • I don't get why people do curb side pickup, if you're going to take the time to dive there, just go in a do your shopping. Myself ive not shopped in a BM grocery store for well over a year. Started doing grocery delivery and will never go back to wasting an hour + each week to go grocery shopping. The delivery fees are well worth not wasting my own time dealing with that.

    • Re: (Score:1)

      by giuntag ( 833437 )
      Call me a boomer, but I hate the "Amazon Fresh" buying experience - I'll take any day a shop where
      - I can pay with cash
      - I can pay with a credit card
      - I do not have to fear that, if I pick up an item and then put it back on the shelf, the system will think that I have taken it out anyway
      - I am forced to use my all-encompassing online profile to buy bread and milk, and give away all my grocery habits to the same company who already has info on my online shopping and music/video listening

    • Comment removed (Score:5, Funny)

      by account_deleted ( 4530225 ) on Tuesday February 04, 2025 @04:46PM (#65141805)
      Comment removed based on user account deletion

    • Amazon only said they had AI powering their Just Walk Out.

      They never said it was Artificial Intelligence so when it turned out to be Actually Indians there was only muted condemnation.

      But apparently enough shoppers felt that the only thing creepier than being watched by Big Brother is being watched by Big Bangalore.

      So their profits fell below sustainability.

      This is reminiscent of Theranos which tried to "fake it 'till you make it" and they didn't so now Liz Holmes is in prison. I was really surprised she d

  • Amazon is a big company specifically because people prefer shopping online. No physical store can have all of the inventory options a person wants all in one place.

    Brick an Mortars are for service companies where it is a necessity the customer, service provider and any goods are co-located. Most Amazon sales are cheap crap and consumables where no customer service exists or should even be required.

  • As others have pointed out the gimmick of 'just walk out' wasn't very enticing. Especially weighed against the so-so implementation of tech like weighing shelves, a bazillion cameras pointed at the yogurt case.

    BUT IMHO the opportunity for Amazon is to make mini stores that sell mostly the stuff that is now behind plexiglass at other convenience retailers. Deodarent, laundry detergent, shave blades...a bunch of other random stuff is a PITA to get a many a Target/Wal-Mart/CVS/Walgreens. Amazon shoudld s

    • Comment removed based on user account deletion

    • Re: (Score:2)

      by dgatwood ( 11270 )

      As others have pointed out the gimmick of 'just walk out' wasn't very enticing. Especially weighed against the so-so implementation of tech like weighing shelves, a bazillion cameras pointed at the yogurt case.

      BUT IMHO the opportunity for Amazon is to make mini stores that sell mostly the stuff that is now behind plexiglass at other convenience retailers. Deodarent, laundry detergent, shave blades...a bunch of other random stuff is a PITA to get a many a Target/Wal-Mart/CVS/Walgreens. Amazon shoudld sell those at its stores.

      Yeah, it was absolutely enticing from the perspective of being not a pain in the backside to shop, had it actually worked reliably. It had the potential to cut retail theft to basically zero. It just didn't work.

      And it would have been absolutely enticing anyway for anybody who has ever had to stand in line for 15 minutes to buy two or three items because the self-check registers aren't in a corral like they should be, so each register has a separate line, and you end up stuck behind the person checking ou

      • Targeting customers is normal. Going for all 100% of the population isn't cost effective. Long story short, the same way Costco has basically no shoplifting "shrinkage" ^1 is because it's membership based. You immediately exclude the most likely shoplifters and you are automatically targeting a population with higher incomes (those willing to pay membership)

        The proposed Amazon concept goes a step further by
        1.) Making the membership cost higher, higher income customer spends more
        2.) Making all lanes se

        • Re: (Score:3)

          by dgatwood ( 11270 )

          Targeting customers is normal. Going for all 100% of the population isn't cost effective. Long story short, the same way Costco has basically no shoplifting "shrinkage" ^1 is because it's membership based. You immediately exclude the most likely shoplifters and you are automatically targeting a population with higher incomes (those willing to pay membership)

          Costco used to avoid shrinkage in large part by not having self-check. That's the main source of shrinkage these days. When Costco added it, shrinkage increased significantly, and I've read that they're actually removing it again in some places as a result.

          I'm also not convinced that people with more money are willing to pay for memberships. In my experience, the people who shop there tend to be those with large families, who buy food in bulk and store it to save money. Wealthy people tend to be less li

          • Membership warehouses will also attract the poor. If someone can do simple math and figure out that the savings of the wholesale costs exceed the cost of membership then they would be dumb as hell to be spending their limited income on full retail prices.

      • And it would have been absolutely enticing anyway for anybody who has ever had to stand in line for 15 minutes to buy two or three items because the self-check registers aren't in a corral like they should be, so each register has a separate line, and you end up stuck behind the person checking out 200 items 100% of the time.

        Amazon's room-o-cameras isn't the only solution to that, though. A few retailers let you use the POS terminal that's already in your pocket (a smartphone) to scan your items and pay, so there's no need to queue up to use one of theirs.

        What Amazon was attempting to solve was a problem that retail stores have when allowing customers to scan their own groceries: some folks are dishonest. From the perspective as a customer though, the only benefit a harder-to-cheat system brings is the possibility that reduce

        • Re: (Score:2)

          by dgatwood ( 11270 )

          A simpler way to solve it is by doing what Walmart does: Require an RFID tag in every package. Then design an RFID scanner that can scan your entire cart at once. The only thing it won't work for is fresh produce, and even that could theoretically be solved if they *really* wanted to, with the exception of fruit sold by the pound.

          • Fresh produce could simply be pre bagged in half or full pound increments. If you want 5 lbs of apples then buy 5 1lb bags.

            • Re: (Score:2)

              by dgatwood ( 11270 )

              Fresh produce could simply be pre bagged in half or full pound increments. If you want 5 lbs of apples then buy 5 1lb bags.

              Except that a lot of folks want to buy... say three bananas, or one tomato, not half a pound of tomatoes. And putting single items into plastic bags will have the anti-plastic police up in arms. The right solution would be a thin RFID tag that's on the underside of a food-safe sticker. This is not necessarily easy to pull off, though. :-)

        • Probably the simplest way to do this kind of pickup items and walk out the store is have all items RFID tagged and an RFID "membership" card you pre-link a credit/debit card to the membership card then on the way out enter a dual door man trap exit. all the RFID items and your membership card are scanned and the 2nd door opens letting you out. This would stop shoplifters because if you don't have a membership card on you then the 2nd door never opens. Sure there might still be some shrinkage due to items th

    • The major 'feature' of the Amazon store is that it was member-only, you had to be a Prime member to open the entry gates.

      Not so. You had to be a Prime member to use "Just Walk Out." But you could shop there without being a Prime member. You just had to go through the checkout.

  • Should have started with Hot Topic / Spirit Halloween style stores.

  • Amazon doesn't know it's own market. (Score:3)

    by Fly Swatter ( 30498 ) on Tuesday February 04, 2025 @04:36PM (#65141785) Homepage
    Which is anti-social and Chinese trinkets.

    Faceless sales and drop shipped items avoiding consumer protection laws.

    I wonder what Amazon's plan is to also avoid the new tarrifs? Suddenly all those Chinese trinkets will first stop at an intermediary country and become Anything-but Chinese made.
  • "Hello, I'd like to by a pound of apples"

    "Would you like half a pound of apples, sir?
    A pound of pears?
    An Apple laptop?
    A pound of nails?

    Sir?

    Sir?
    "

  • It's almost like... (Score:3)

    by JoeDuncan ( 874519 ) on Tuesday February 04, 2025 @05:01PM (#65141833)
    ...those are two very different business models.

  • Whole Foods is doing well enough. Amazon can do a working store if they did it the traditional way. Not Just Walk Out, but just a traditional store.

    We don't need another Temu or Shein. We need stores that have decent customer service, even if it might cost 1-2 percent more on products.

    The market desperately needs something like an old school Sears. Something that sells decent, easily repairable appliances, where even the cheapest item is not bad. The ability to walk in and pick something up and know it

  • ... and that's a problem for Amazon.

    From a customer viewpoint, the nice thing about Brick and Mortar is that they are heavily regulated, easily sued, and easily tracked down. They simply cannot succeed in business if they happen to stock low quality or counterfeit merchandise. This gives the customer some confidence that they probably aren't going to be completely ripped off.

    But Amazon's profitability specifically depends on avoiding these same niceties. They do this by only taking responsibility as the "mi

  • For one they act like they have some high tech system for checking out but in reality it is people in a far flung county monitoring and checking out items in your "just walk out" cart.

    As far as monopoly Amazon has the option to buy a substantial chunk of SpartanNash (which has two names do to another prior merger). In fact at the time of the option to buy it would be its largest shareholder. We will see if the current set of people really do care "about the cost [quality and uniqueness of items you can

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