operates “B” and “C” malls. Its sales per square foot rose just 13
percent, to $374, during that same period.^70
So, stores are here to stay—if we are careful what stores we’re
talking about. But so is e-commerce. Ultimately, the real winners will
be those retailers who understand how to integrate both. Amazon aims
to be that company.
The next retail age will be coined the “multichannel era”—a time
when integration across web, social, and brick and mortar is crucial to
success. Everything points to Amazon dominating that era as well. I’ve
said for a while that Amazon will open stores—lots of them. It makes
sense for them to acquire either a struggling retailer, like Macy’s, or a
company with a large footprint and vascular system, like a
convenience store franchise. Amazon’s greatest expense is shipping,
and their highest objective is to reach more and more households in
less and less time. This is why it made sense for Amazon to acquire
Whole Foods, a 460-store franchise^71 that will give Amazon a physical
presence in urban centers, where affluent, fast-to-reach consumers
live. Amazon has had a decade of selling groceries online without
much success,^72 as customers prefer to buy produce and meat in
person. Key to success in the multichannel era is knowing which
channel to optimize and how to cater to our hunter-gatherer instincts.
As of this writing, in addition to the Whole Foods acquisition,
Amazon is testing its own grocery stores in Seattle and the San
Francisco Bay Area. It now has bookstores in Seattle, Chicago, and
New York City (with others planned for San Diego, Portland, and New
Jersey). Why does Amazon—bookstore killer—need brick-and-mortar
bookstores? To sell the Echo, Kindle, and its other goods. Customers
want to see, touch, and feel products, Amazon’s chief financial officer
Brian Olsavsky admitted.^73 The firm is also testing a dozen pop-up
retail stores (with a total of perhaps one hundred planned by the end
of 2017) targeted at U.S. malls.^74 This is happening even as venerable
retailers Macy’s and Sears, including its Kmart chain, and mall giants
JCPenney and Kohl’s have announced plans to shutter hundreds of
stores in 2017.^75 ,^76
Meanwhile, to get a leg up in the multichannel era, brick-and-
mortar behemoth Walmart spent $3.3 billion to buy Amazon