Technology

Alibaba Group Holding Ltd (NYSE:BABA) And Amazon.com, Inc. (NASDAQ:AMZN) Increasingly Turning To Physical Stores

Despite the end of brick and mortar stores having been predicted, Alibaba Group Holding Ltd (NYSE:BABA) and Amazon.com, Inc. (NASDAQ:AMZN), who were once pure-play ecommerce firms are now opening their own physical retail centers to become some sort of hybrid retailers. In the case of Amazon, what started out as an experiment is quickly gaining a foothold. This all started in late 2015 when the giant online retailer launched its first brick-and-mortar bookstore in the states of California, Washington and Oregon. Now the king of ecommerce is looking to open more stores in the east of the United States namely in Massachusetts, New York and New Jersey.

Drive-up grocery stores

Amazon has also revealed that it is launching what it is calling drive-up grocery stores. With these stores, the shopping is done online but then one indicates their preferred time of picking up the groceries. All they have to do is drive up to the store and the groceries will be loaded into their vehicles. Some of the groceries that will available for sale through this method include bread, dairy, fresh produce and meats. Those who have signed up to Amazon Prime can pick up unlimited orders for free while AmazonFresh members can pick their groceries within 15 minutes after placing an order.

What seems to be driving this trend is ‘webrooming’ and ‘showrooming’. With showrooming, shoppers go to physical stores to look around products but then opt to buy them from online stores. But webrooming is the exact opposite of that as it involves potential shoppers viewing products online but instead choosing to buy them from a physical store.

Showroom spaces

Thus the reason for Amazon’s physical stores is not just to make sales but to also serve as a showroom.

“We think bookstores are a great way for customers to engage with our devices, to see them, touch and play with them,” revealed Amazon’s chief financial officer, Brian Olsavsky, in reference to the ecommerce giant’s range of devices such as Fire Tablet, Kindle, Fire TV and Echo.

In the case of Alibaba, the Chinese ecommerce firm’s strategy has been to partner with one of the world’s biggest retailers – Bailian Group.

Amazon Inc shares rose by 2.14% Wednesday and closed at $874.32.

Leave a Reply

Your email address will not be published. Required fields are marked *