Amazon Plans To Open Department Stores In California, Ohio

After years of beating brick-and-mortar retailers black and blue, Amazon is ready to try and beat Macy’s, Target and Wal-Mart at their own game.

According to WSJ, Amazon is reportedly planning to delve into the department store game by opening a flurry of 30,000-square-foot facilities, starting in “test” markets like Ohio and California.

While the plans aren’t yet final, the Amazon-branded department stores will feature mostly Amazon-branded goods ranging from clothing, to electronics to other household items.

Since buying Whole Foods and launching a smattering of “Amazon Go” convenience stores, Amazon’s retail push has focused mostly on food. The 30,000-square-foot stores will essentially function like mini-department stores (department stores in the US are typically around 100,000-square-feet). The scaled down format is similar to new stores being opened by Bloomingdale’s and Nordstrom.

The decision comes as Amazon, which has helped to kill off the American mall, seeks to eat their lunch. Amazon recently became the largest retailer of clothing in the US, surpassing Wal-Mart, accordng to Wells Fargo.

While Neiman Marcus, Lord & Taylor, JC Penney and Stage Stores all filed for bankruptcy last year, analysts expect discount-focused chains like Macy’s and Kohl’s to report strong earnings this quarter.

“People are absolutely returning and shopping in department stores,” John Idol, the chief executive of the Michael Kors parent Capri Holdings Ltd. told analysts on a conference call last month.

Amazon expects physical stores will help it sell even more clothing, which is tricky to buy online because of concerns about size and fit. Also, the only type of commerce offering more “instant gratification” than shopping online is…shopping in person. AMZN executives (who now answer to CEO Andy Jassy) believe bricks-and-mortar shopping “would enable better engagement with customers and provide a showcase for its devices and other products.”

Amazon opened its first physical store – a bookstore in Seattle – in 2015, and have been known for experimenting with cashierless technology.

News of Amazon’s entry into the department store space weighed on shares of Kohl’ and other department store stocks in premarket trade on Thursday.