Amazon relies on offline

UNITED STATES, WASHINGTON (OBSERVATORY) — US retail giant opens another 4-Star store in Boston and adds another Amazon Books outlet in Nashville. Thus, the retailer expands its offline retail presence by betting on projects other than Whole Foods, which account for the lion’s share of Amazon’s physical retail stores.

Why does Bezos need this? The reason is the search for new development paths. According to Business Insider, the Internet segment is not developing as fast as the owners of the company would like.

Amazon’s online sales growth has been weak over the past few quarters. In the II quarter of 2019, the volume of online retail sales of the company reached $ 31 billion, which is 16% of annual growth. And this was the best quarterly indicator since the end of 2017.

However, for most of the past year and a half, Amazon’s online retail growth has remained largely unchanged, between 11% and 14%. This may be the result of macroeconomic changes, the saturation of the brand or both, but if the trend continues, it may force Amazon to look for new segments for expansion, the publication emphasizes.

At the same time, it is physical retail that gives the company the necessary space for maneuver. Despite the rapid growth in e-commerce, it is offline stores that account for almost 90% of total US retail sales.

Amazon works in this segment in several directions, although it is still at the initial stage: in the second quarter of 2019, “real” points brought Amazon only $ 4.3 billion, showing an annual growth rate of only 1%. However, additional investments and active expansion of the network may help the retailer gain a considerable share of the US retail market.

In addition, work in all directions at the same time significantly accelerates sales. According to Business Insider, consumers who make purchases through multiple channels (that is, both online and offline) tend to spend more on a particular seller.

Despite the fact that such customers make up only 17% of the customer base, they account for 34% of all expenses. Having spent $ 100 online with one seller, consumers will spend another $ 171 with him in an offline store over the next 30 days. So the online giant’s bid on “real trading” is more than justified.


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