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Amazon to Shut Pop-Up Stores, Focus on Bookstores & 4-Star

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Amazon (AMZN - Free Report) is putting a stop to its pop-up kiosk program in the United States.

The company plans to shut down all 87 pop-up stores located inside the Whole Foods stores, Kohl’s (KSS - Free Report) retail stores and shopping malls by the end of April.

Notably, these kiosks enable customers to try Amazon’s own products and services like Echo speakers, Fire tablets, Kindle, Prime Video and Audible. However, the latest plan can be detrimental to customer experience.

Nevertheless, Amazon has reached a stage where it can forgo kiosks and sell products solely on its e-commerce platform in the United States.

Diversifying Focus

With the aid of the latest move, the company will be able to diversify its focus and concentrate more on its retail expansion strategies.

As part of its plan of discontinuing pop-up kiosks, the company intends to open additional bookstores and 4-Star stores, which in turn will expand its physical presence.

In the context of bookstores, Amazon Books was first opened in 2015 and now there are 17 of these stores across the United States in total. We believe rising number of Amazon’s bookstores will strengthen its presence in the U.S. book retail market.

Meanwhile, Amazon 4-star is a new kind of store that stocks in four-star or beyond rated products from various product categories.

Further, there are digital price tags for each product reflecting its Prime price and the marked price. This allows the Prime shoppers to pay the online discounted price but the non-Prime members will have to pay the marked price. Notably, the store was first opened in late 2018.

We note that expansion of 4-star stores will not only boost Amazon’s customer reach but is also likely to drive the Prime subscriber base.

Retail Strategies to Aid Competitive Edge

Amazon is leaving no stone unturned to bolster retail footprint further on the back of its aggressive retail strategies — strategic acquisitions, partnerships and distribution strength. This continues to intensify the market competition.

Moreover, its plan of expanding bookstores and 4-star stores are likely to provide a competitive edge against the big retailers like Walmart (WMT - Free Report) and Target (TGT - Free Report) which also stock a huge collection of books in their stores.

Apart from the latest plan, the e-commerce giant is aggressively looking into opening a new chain of grocery stores across major U.S. cities, with the intention of disrupting the retail space further.

Moreover, its strong focus toward taking the number of Amazon Go to 50 and 3,000 by 2019 and 2021, respectively, poses serious threat to the traditional retailers due to the cashier less technology in these stores.

We believe Amazon with the above-mentioned strong endeavors will continue to bolster market position in the core retail industry.

Currently, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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