Amazon’s world-domination tour continues apace. The e-commerce giant gobbled up Whole Foods last month for $13.7 billion, boosting customer traffic by 25 percent after dangling the carrot of lower prices, according to data from Foursquare Labs.
And the company’s invasion into the brick-and-mortar landscape may not be over yet. Roughly a dozen Amazon bookstores have popped up around the country, with more in the pipeline. Starting in October, Amazon-branded “smart home spaces” will be plying Kohls shoppers in the Los Angeles and Chicago areas with Kindles, Fire tablets, and Echo speakers.
There are even rumblings that Amazon may broaden its burgeoning store presence with another acquisition, perhaps by swooping in to the rescue of one of the myriad floundering department-store chains.
Scott Galloway, the New York University brand expert who predicted Amazon’s acquisition of Whole Foods, told Recode’s Kara Swisher that Nordstrom would be the “logical next one” to bring into its fold. “It would be cheap, it’s in Seattle, they’re operationally very sound, it’s a great company and [Amazon is] trying to establish relationships with high-end brands, which they have been unable to do,” he said.
It’s true that Amazon’s various forays into fashion have had a checkered history. Although Cowen and Company predicts that Amazon will eclipse Macy’s as America’s biggest apparel seller with around $28 billion in projected sales this year, the e-tailer’s milieu has typically consisted of accessible basics like polo shirts and shorts. An August report by Galloway’s research firm, L2, for instance, revealed that Amazon Essentials was the top performer among the company’s private-label investments.
[Read more about Amazon’s place in the retail landscape: Moody’s: Amazon’s Retail Dominance Is a Myth And Nothing More]
But even with growing sales, Amazon has miles to go before its clothing can go toe to toe with private labels by established retail chains. A Slice Intelligence report published in April found that Macy’s Alfani line earned nine times the revenue of Amazon’s Lark & Ro from January 2016 through February 2017. Nordstrom’s Halogen outperformed the Amazon brand by a factor of 11.
An Amazon-Nordstrom merger would not only increase Amazon’s fashion cachet and footprint, it might also be kismet: Nordstrom and Whole Foods have an overlapping customer base, according to Jeff Glueck, CEO of Foursquare. Per the app’s data, Nordstrom shoppers are twice as likely to shop at Whole Foods than the average consumer, Glueck wrote in a blog post in August. As a result, an Amazon-owned Nordstrom chain would “deepen Amazon’s relationships with its expanding core base,” he added.
While industry waits to see if another takeover is on the table, the retail juggernaut is keeping busy, further roiling the business world on Thursday with an announcement that it would be establishing a second North American headquarters and staffing it with up to 50,000 employees over the next 20 years.
The company’s proposed campus, which Amazon said would be a “full equal” to its current Seattle base, is expected to start a bidding scrum among cities hoping to snare an anticipated $5 billion in construction funds, not to mention the tens of billions of additional dollars Amazon promises to invest in the surrounding community.
Wherever Amazon’s so-called HQ2 winds up, the compound will be nothing short of transformational for the local municipality. As Seattle’s largest corporate employer, the e-tailer estimates that its investments helped the city reap an extra $38 billion from 2010 through 2016 alone.
The company has also divulged plans for a new, state-of-the-art 855,000-square-foot fulfillment center in Staten Island, N.Y., one that will create over 2,250 new full-time positions while providing “opportunities for employees to engage with advanced robotics,” Amazon said.
While Amazon expands its presence in the U.S., it seems the company is reasserting itself in China, where it has struggled against established rivals JD.com and Alibaba. The company is looking to fill hundreds of jobs, including senior executives, internet software engineers, and hardware designers for its digital assistant Alexa, as it tries to gain market share.
Amazon’s aggressive expansion is simply another sign of its seemingly unquenchable desire to cater to all of the minutiae of our daily lives, from the entertainment we watch to the clothes we wear, in spaces both physical and digital.
Beyond profits and losses, the third quarter retail earnings calls revealed some key strategies related to off-price, holiday and sourcing strategies.Read more
Primark and Sports Direct, are being called out by the Department for Business, Energy and Industrial Strategy (Beis) for underpaying their workers.Read more
Edited, a leading data authority, unveiled five groundbreaking trends that may shake up retailers, consumer activity and supply chains in 2018.Read more
In a letter to business partners and suppliers, Blue Farm Textiles announced that it will dissolve Blue Farm Textile Limited after July 1, 2018.Read more
The e-commerce juggernaut is proving to be quite challenging for shippers and suppliers this holiday season, with more than two weeks to go.Read more
Under Armour strengthened its digital division with two new executive appointments, plus MSYG promoted several members of its U.S. manufacturing team.Read more
G-Star Raw, a purveyor in innovative denim design, is minimizing the industry’s carbon footprint with its new sustainable G-Star Elwood RFTPi jean.Read more