With all the untold billions Amazon has, the astronaut Jeff Bezos can afford to experiment. Which he does with some regularity. Some of his newer ideas, which have been in the papers, might raise an eyebrow or two--such as his plans to open a series of physical bookstores after years of selling digital books on that Kindle device.
A most surprising fact: Amazon has a whole series of brick and mortar stores, grocery stores, convenience stores and more. But it looks like Mr. Bezos isn't finished experimenting with physical locations yet.
"Amazon plans to open several large physical retail locations in the U.S. that will operate akin to department stores, a step to help the tech company extend its reach in sales of clothing, household items, electronics and other areas," The Wall Street Journal reports.
"Some of the first Amazon department stores are expected to be located in Ohio and California, the people said. The new retail spaces will be around 30,000 square feet, smaller than most department stores, which typically occupy about 100,000 square feet, and will offer items from top consumer brands."
We can imagine how the pitch meeting went with his tech people. But to quote the poet Huey Long when he argued with his boys about backing the campaign of Arkansas' Hattie Caraway: "Let's take a vote. I'm the chairman. I vote Aye. And the motion is carried."
Department stores? Has Mr. Bezos not watched all those closing locations left and right? Department stores that once formed the foundation of malls across the fruited plains have folded over the last few decades, leaving empty spaces thanks to a large shift toward online shopping. And Amazon played a key role in that.
But it's a business experiment, one Amazon must have some confidence in, because building department stores and maintaining them isn't cheap. The company must have some market research somewhere that said this would be worth a try. Then again, with the money Amazon makes, it can afford to lose a few million dollars without sweating the details.
Can you see an Amazon department store in Arkansas one day? Such an idea isn't far-fetched. The online giant already has a fulfillment center under construction at the port of Little Rock, and just last month the paper had a story about plans to widen the site for more parking spaces.
Then there's also a smaller fulfillment center under construction in North Little Rock. The company has had an Arkansas presence since 2018 and clearly has more plans for the Natural State as it looks to speed up deliveries for customers.
This is to say nothing of Whole Foods Market, which Amazon owns. It has locations in Little Rock and Fayetteville. So could Amazon be thinking about putting one of these upcoming department stores in Arkansas? Why not?
As for Arkansas' own giant retailer (and Amazon's seemingly eternal rival), Walmart isn't doing too bad, either.
"Walmart Inc.'s second-quarter revenue grew 2.4 percent over last year's pandemic-driven blowout quarter, the company said Tuesday," the papers say. "Before the markets opened, the Bentonville retailer reported second-quarter revenue of $141 billion, compared with $137.7 billion in the second quarter of 2020."
CNBC reports Target had good earnings numbers last week as well, beating estimates. So if these big box stores are doing so well, maybe it's not entirely crazy for Amazon to look at trying new department stores.
Walmart seems to be doing the opposite, always trying to boost its online sales numbers to take on Amazon. Apparently our home-grown Arkansas retailer has its own market research.
The competition between Amazon and Walmart probably isn't going to slow anytime soon. The New York Times reported customers now spend more at Amazon than they do Walmart: "Amazon has eclipsed Walmart to become the world's largest retail seller outside China, according to corporate and industry data, a milestone in the shift from brick-and-mortar to online shopping that has changed how people buy everything from Teddy Grahams to teddy bears."
The report continues, "Propelled in part by surging demand during the pandemic, people spent more than $610 billion on Amazon over the 12 months ending in June, according to Wall Street estimates compiled by the financial research firm FactSet. Walmart on Tuesday posted sales of $566 billion for the 12 months ending in July."
This doesn't mean Walmart is hurting for cash, but that news caught a few of us by surprise. The pandemic has changed how a lot of people shop, and it seems Amazon used that shift to pull ahead a little bit. For now.
The good news from this competition: There's always one guaranteed winner: the shopper, whether at a new department store or in online membership perks.