The news: Amazon is closing all 68 locations of its bookstores, 4-star shops, and pop-up stores, per Insider.
A company spokesperson said the company would continue to invest in developing physical retail concepts and technologies, as well as its grocery business, Amazon Go stores, and cashierless capabilities, per CNBC.
More on this: These store closures will have a miniscule impact on Amazon’s revenues, but they speak to the shift in the company’s priorities as it focuses on areas where it has the most opportunity to grow.
Innovation station: Amazon’s approach to brick-and-mortar has often been more experimental than practical, hampered by the company’s lack of experience and the absence of a concrete strategy.
What lies ahead: Amazon’s brick-and-mortar priorities clearly lie with grocery, despite its struggles to compete effectively with Walmart and Target, both of which have a much larger retail footprint.
The big takeaway: Amazon’s decision to shed unsuccessful retail formats points to the pressure that Andy Jassy, Amazon’s new CEO, is under to improve profitability and streamline operations.
That doesn’t mean Amazon’s investments in brick-and-mortar retail will end—they will likely be tied more closely to the grocery business.