What: A critical piece of thinking about Amazon’s failed experiments in physical retail.

Why it is important: The author raises an interesting question: why, instead of starting from scratch, Amazon does not buy a significant player and immediately benefits from its scale effect?

This article critiques Amazon's strategic approach to physical retail under CEO Andy Jassy's leadership, contrasting it with its success in e-commerce and cloud computing. The author suggests Amazon's foray into various brick-and-mortar models, including Whole Foods and Amazon Style stores, has been misguided and unsuccessful. They argue that Amazon, fundamentally a tech company, lacks the intrinsic retail brand persona and experience in physical retail, which is evident in their struggle to establish a successful in-store presence.

The author questions why Amazon didn't opt to acquire existing retail chains like Kroger and Kohl's to quickly establish a physical footprint, given its enormous market capitalization. They point out that Amazon's slow and seemingly uncoordinated approach to integrating physical stores into its business model contrasts with Walmart's more effective strategy of acquiring Jet.com to boost its digital presence.

The piece also touches on the concept of omnichannel retail, where integrating digital and physical platforms is crucial for customer acquisition and distribution. The author suggests that Amazon could have leveraged acquisitions to instantly gain a vast network of stores for distribution and customer engagement, which would have been more efficient than building from scratch.

In conclusion, while acknowledging Jassy's efforts to rationalize Amazon's strategy and focus on profitable growth, the author speculates that Amazon might be better off sticking to its e-commerce roots rather than trying to dominate every retail channel. The future of Amazon's physical retail endeavors remains uncertain, and the author expresses skepticism about its success in this area.

Amazon’s failed physical retail experiment: a point of view