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Amazon's Offline Retail Store Plan to Boost Germany Presence

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Amazon (AMZN - Free Report) is focusing on expanding in the German retail market through the aid of physical stores. Reportedly, the company is planning to set up offline retail stores in the country.

This is in sync with Amazon’s strategy to expand in Germany’s retail space, which is dominated by low price discounters and traditional supermarket chains.

Given this scenario, the company’s plans for physical stores will help it to capitalize on the immense growth prospects present in this particular market.

Further, the move will help the company in reaching those traditional customers who are still hesitant to shop via online platforms. Hence, the move is likely to drive the company’s sales.

Aggressive Expansion Stance in Germany

Amazon is leaving no stone unturned to bolster presence in Germany, which is considered to be its second-largest market after the United States.

Apart from the physical store plan, the company announced its intentions to open a new fulfillment center in the country last year, in a bid to meet the growing demand in the online shopping space.

Moreover, the company already operates 12 fulfillment centers in Germany. This has strengthened the company’s position in the country’s retail space.

Further, Amazon recently obtained the broadcasting rights of European soccer Champions League matches in Germany. Streaming Champions League matches is likely to drive Prime subscription in the country, which in turn will drive the top line.

Strengthening Physical Presence

Amazon’s latest initiative is in line with its persistent efforts toward expanding physical presence in order bolster its retail business strength globally.

In the United States, this e-commerce giant has taken the fight to the traditional retailers with its rapidly expanding line of offline stores. Recently, the company inaugurated its Amazon 4-star store in Natick, MA — marking the fifth such store in the country.

Further, its cashierless stores called Amazon Go is spreading across the United States at a fast pace. Moreover, the company strives to take the number of these stores to a record of 3,000 stores by 2021.

Additionally, Amazon intends to open a new chain of grocery stores in a bid to strengthen presence further in the retail space. The company is planning to spread the new chain across all the major cities of the United States.

Further, its buyout of Whole Foods remains a major step toward strengthening its physical presence. Moreover, increasing number of Amazon Books stores is a tailwind.

The company has also been taking steps to bolster its physical presence. The latest initiative is in line with it.

Reportedly, Amazon has acquired central London retail space in a bid to set up its first cashierless store outside of the United States.

Further, the company is gearing up to roll out pop-up stores in Britain as part of its pilot project.
The stores are named as “Clicks and Mortar” and the first of it has been already inaugurated at St. Mary’s Gate, Manchester, England.

Notably, these stores offer electronics, homeware, food and drink, and health and beauty items to customers from several small online sellers.

We believe expanding physical presence globally will continue to affirm its strengthening stake in the retail industry.

Zacks Rank & Stocks to Consider

Currently, Amazon Carries a Zacks Ranks #3 (Hold).

Some better-ranked stocks that can be considered in the retail-wholesale sector are Zumiez ZUMZ, Genesco GCO and Fiverr International FVRR. While Zumiez and Genesco sport a Zacks Rank #1 (Strong Buy), Fiverr carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long term earnings growth rate for Zumiez, Genesco and Fiverr is currently pegged at 12%, 5% and 44.18%, respectively.

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