In the UK, non-essential retailers are finally set to re-open on 15 June after months of forced closure. However, the effects of Covid-19 are extremely far-reaching – it is likely that some retailers, especially smaller stores on local high-streets, will sadly remain closed for good. So, is Covid-19 accelerating the death of the high-street?
Not for everyone, it seems. It is rumoured that Amazon is looking to acquire all or parts of JCPenney, one of the USA’s largest apparel and home retailers, which has 850 physical stores across the USA and Puerto Rico. But why does Amazon want to acquire a company with such a large physical footprint? Well, since 2015, Amazon has actually been opening stores, rather than closing any.
Amazon operates its physical stores under numerous different brands, including “AmazonBooks” and “AmazonGo”, although we are yet to see any stores pop up permanently in the UK. Perhaps Amazon is taking the view that the future of retail is blended – very few people shop solely online, but instead use a mixture of online and in-store purchases. A physical, in-store experience was the thing that Amazon was missing before.
There are also a few potential factors that Amazon may be thinking about with this potential acquisition:
- the need to grow its clothing and accessories sales and allow customers to see and feel its own brands;
- the need for more physical distribution facilities especially when tackling the last-mile costs; and/or
- the need to create a technology driven store, with cashier-free systems.
Yet, it’s important to point out that Amazon is the world’s largest e-commerce company. It can afford to spend money on bricks and mortar and this seems to be one of its main missions. It’s easy to suggest that high-street retailers need to become more tech-savvy to give shoppers an interesting and unique shopping experience, but the fact of the matter is that a lot of retailers cannot afford this.
The likes of Amazon may be thriving, especially with the uptake in e-commerce during the lockdowns which have impacted the whole world, but Covid-19 is likely to have forced certain retailers to close for good.