In an unexpected twist, Amazon started opening physical bookstores in 2015, with the first in Seattle (see Exhibit 3f). The stores displayed a limited range of books along with Amazon hardware. The seventh physical store was opened in New York in May 2017. The company added a number of “bookless” bookstores on college campuses where students could order textbooks and items for furnishing dorm rooms to be picked up later in the store. Students received a 50% discount on Prime membership.
The purchase of Whole Foods in mid-2017 marked a significant increase in Amazon’s commitment to physical stores, adding 460 locations to its portfolio.
In January 2018, the company opened to the public an Amazon Go convenience store with no cash registers. This store introduced the concept of Just Walk Out (JWO) shopping. Customers simply removed products from the shelves and walked out; sensors were used to charge them automatically for their purchases.145 In September 2018, Bloomberg reported that Amazon would open up to 3,000 Go stores by 2021.146 That month, Amazon also opened a store in Manhattan called 4-Star, which sold products from Amazon with more than 4 out of 5 stars.
Physical store sales were $4.5 billion in the final quarter of 2017, falling to $4.4 billion in the final quarter of 2018, and $4.3 billion in the first quarter of 2019.
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