business news in context, analysis with attitude

The Wall Street Journal reported last week that Amazon is closing down its two "Amazon Style" clothing stores, one in Los Angeles and the other in Columbus, Ohio.

The shuttering follows Amazon's recent pattern of closing bricks-and-mortar concepts that did not get traction, including its bookstores and Four-Star stores.  Amazon also largely has paused the opening of new food stores under the Amazon Fresh and Amazon Go banners, though it has continued the opening of Whole Foods stores.

Amazon also has been cutting programs and businesses that have been deemed as a drain on its momentum and absorbing more resources than they are worth.  Some 27,000 jobs have been eliminated during the past year or so, though the company hired far more than that number during the pandemic.

The closures will take place by the end of this week;  Amazon apparently decided there was no benefit to staying open through the end-of-year holiday season.

Amazon spokeswoman Kristen Kish tells the Journal that bricks-and-mortar retail “remains an important part of our business, and we’re continuing to invest in growing our grocery stores business.”

However, CEO Andy Jassy has said in the past that Amazon has not yet identified the grocery format that it thinks will drive growth both short-term and long-term.

KC's View:

MNB readers may remember that I visited the Los Angeles-area Style store about a year ago.  While I thought that the technology was interesting, I also thought it reminded me of Hointer, which had tested the market for a tech-centric clothing store years earlier.  I also thought that the physical package was pretty inefficient.

Here's the video report I filed at the time.

To me, Amazon's approach to this format is most interesting for what it does not do.  Because I went into the store and tried things on, they had some information about me - but I never received any communications trying to get me back into the store.  (Maybe they took a look at my profile and figured I was a lost cause.)

It also continues to interest me how little Amazon seems to connect the dots among its various customer experiences and the data it is able to generate.  I've been an Amazon customer for more than a quarter-century, am a Prime member and dedicated Subscribe & Save user, I go to my local Whole Foods at least once a week (though my shopping patterns make it clear that it is not my primary store), and I've been to numerous Amazon Go and Amazon Fresh stores, in addition to having made purchases at Amazon's Four-Star stores and bookstores.  And yet, there seems to be no willingness to use that data to figure out ways to help me make my life easier.  None.

Now, maybe that's a good thing.  Maybe that's Amazon being respectful of my privacy and careful about using its data.  But I don't think that's it - I just think it is not connecting the dots.  (It certainly hasn't asked for my permission to connect the dots, which would be an acceptable approach.)

This should be Amazon's secret sauce, its differential advantage.  But instead, the company seems to be ignoring the possibilities.  Maybe this is because it is innovating on too many fronts to make the connections.  Or maybe it is because there's nobody thinking about this stuff strategically.

I'm honestly not sure, because connecting the dots would seem to be a natural outgrowth of a desire to make it easy for me to buy stuff, as opposed to just selling me stuff.  The evidence of the moment, of course, would suggest that Amazon's commitment to this construct is not what we thought it was.