Could Amazon launch a department store network?

Major US media outlets have reported a rumour that Amazon is about to open a chain of department stores in malls across the country.

The department stores will sell traditional department store wares – clothes, homewares, electronics and the items you might find on the better-searched pages of the Amazon store/marketplace.

Amazon is one of the key players in destroying the traditional bricks and mortar department stores, but has clearly seen a purpose in going into the concept, as it did the bookstores and convenience stores it has lately opened.

When asked about the rumours, Amazon’s spokesperson responded to the effect that they do not comment on rumours – not unlike when word got out about the Amazon Air air-cargo network a few years back.

Industry commentators have pointed to some reasons for Amazon launching a department store network. Last mile delivery is very expensive, as is the returns process. In fashion for instance, where someone would try on a shirt at a department store and then choose whether to buy, they much buy first and then return if they don’t like it – having paid $0 for delivery due to their Prime membership meaning Amazon shoulders the outbound cost. In this case and others, a department store concept would drive efficiencies into the system.

It is very much a rumour for now, but a rumour with a sound source. No timeline is available, and it certainly won’t appear ahead of the 2021 peak delivery season. Will we see the first in 2022? We can only speculate for now.

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