Amazon mulled opening discount stores

The news: The ecommerce giant was reportedly going to launch a chain of discount home goods and electronics stores last year, but those plans were derailed by the pandemic and the debut of its grocery chain Amazon Fresh, which forced employees to focus on day-to-day operations. Amazon had considered opening permanent stores, along with pop-up locations in malls and parking lots, to carry unsold inventory sitting in Amazon’s warehouses at steep discounts. The stores would’ve helped the etailer clean out its warehouses and manage surplus inventory.

The bigger picture: Amazon operates 96 physical stores and seven mall pop-ups under its own brand, and Amazon-owned Whole Foods also has more than 500 grocery stores. Building out its physical footprint could let Amazon expand curbside pickup, which has become more popular during the pandemic. The etailer could also use these stores to help with ecommerce fulfillment and to combat shipping delays.

Why it’s worth watching: If Amazon follows through with this plan as the economic effects of the pandemic subside, the stores could help it deal with surplus inventory––boosting revenues––and tackle fulfillment obstacles. It would also give the ecommerce giant more chances to test payments technology like its autonomous checkout solution, biometric payment offering, and smart shopping carts, which could draw in more customers: More than half (57%) of 30,000 survey respondents said they’d be excited to see an Amazon Go or other AI-enabled store come to their neighborhoods, per Pipslay.