This Chart Shows Why Amazon Needs To Grow Its Physical Retail Presence

Posted: Nov 10, 2017

For certain categories, in-store shopping is still more popular than buying online, according to a new survey.

Amazon has been making a strong push towards expanding its physical retail business.

It's no secret that Amazon is turning itself into a major physical retailer.

Besides Whole Foods, which it bought for more than $13 billion this year, Amazon now has 13 bookstores, dozens of pop-up stores and partnerships to put products in stores run by Kohl's and Safeway.

According to The New York Times, Amazon also may open stores that sell furniture and household products.

Why is the e-commerce giant so aggressively pushing into physical retail? Because that's where people prefer to buy most of their stuff.

Financial research firm Gordon Haskett said in a recent survey that aside from music, books, movies and small appliances, consumers showed a preference for in-store purchases. For categories like groceries, household, and health and beauty, buying in a store was more than three times more popular than buying online.

"Despite Amazon's dominance in online traffic, the majority of purchases in several sub-categories still occurs in store," Gordon Haskett wrote in a note this week.

Amazon has not shared much detail behind its retail expansion strategy. The company previously said that bookstores provide another way for the company to showcase its hardware devices like the Echo.

Amazon CFO Brian Olsavsky said during last month's earnings call that physical retail is here to stay.

"You will see more expansion from us," Olsavsky said during the call. "It's still early, so those plans will develop over time."

By Eugene Kim
November 8, 2017

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