7957e52d44b0445e63e3959104f0455249088fe0 Injection University Amazon closing eight Amazon Go convenience stores in latest tightening of its physical retail | Tech Power

Amazon closing eight Amazon Go convenience stores in latest tightening of its physical retail

An Amazon Go location in downtown Seattle. (GeekWire File Photo / Kurt Schlosser)

Amazon announced Friday that it is permanently closing eight of its high-tech Amazon Go convenience stores, including two in Seattle. It’s the latest move by the tech giant to pull back on some of its brick-and-mortar retail operations.

“Like any physical retailer, we periodically assess our portfolio of stores and make optimization decisions along the way,” an Amazon spokesperson said in an emailed statement.

The two impacted stores in Seattle are located downtown, in the Macy’s Building at 3rd Avenue and Pine Street, and at 4th Avenue and Pike Street. Both stores have been closed for some time, according to Amazon, and are located in a part of downtown that has been especially troubled by crime and open-air drug use.

Two stores in New York City and four in San Francisco will also close. The affected stores will continue to operate until April 1.

“We remain committed to the Amazon Go format, operate more than 20 Amazon Go stores across the U.S., and will continue to learn which locations and features resonate most with customers as we keep evolving our Amazon Go stores,” the spokesperson said.

The company said it will continue to open new stores. A location south of Seattle in Puyallup, Wash., recently opened.

Inside the first Amazon Go store in Seattle. (GeekWire File Photo / Kevin Lisota)

The move to tighten its physical retail belt comes exactly a year after Amazon announced it was closing 68 brick-and-mortar stores, including all of its Amazon 4-star, Books, and Pop Up stores. The company said at the time that it planned to focus more on its Amazon Fresh, Whole Foods Market and Amazon Go grocery and convenience stores.

In the time since, Amazon has been hit by the same economic uncertainty as a number of large tech companies. Earlier Friday, Amazon confirmed that it is pausing construction on its HQ2 project in the Washington, D.C., area.

The company laid off 18,000 corporate and tech employees at the end of 2022 and into 2023 — the largest cuts in its 28-year history. CEO Andy Jassy said in a memo to employees in January that Amazon Stores (the company’s retail arm) would be among the impacted divisions.

At the end of January, Amazon closed one of two Fresh Pickup locations in Seattle. The facility in the Ballard neighborhood served as a drive-up grocery pick-up service for Amazon Prime members as well as a drop-off spot for package returns.

The Information reported in December that at least seven newly built Amazon Fresh locations in the U.S. are sitting empty as store openings ground to a halt. It referred to the locations as “zombie” grocery stores, and said keeping them in limbo could be a cost-cutting tactic for the tech giant.

In addition, Bloomberg reported last fall that Amazon was closing or abandoning plans for dozens of U.S. warehouses as the e-commerce giant unwound some pandemic-era expansion efforts.

Overhead cameras inside an Amazon Go store. (GeekWire File Photo / Kevin Lisota)

Amazon opened the first Go location at the base of its Day One headquarters tower in Seattle in 2018. The store ushered in the tech giant’s cashierless “Just Walk Out” technology, which relies on an array of cameras and sensors to determine what shoppers are picking up. Shoppers are charged to a credit card used upon entry, and can leave without waiting in a checkout line.

The tech is now used in a number of Amazon’s larger Amazon Fresh grocery stores, two Whole Foods stores, as well as in food stores located inside Seattle’s Climate Pledge Arena, T-Mobile Park and Lumen Field. Amazon opened the first suburban Go location north of Seattle in Mill Creek, Wash., last April.

Amazon is also bringing the Just Walk Out technology beyond its own walls, selling it to other retailers. And in 2021 it opened a store with Starbucks that includes the cashierless checkout system.

Amazon opened another physical store concept with Just Walk Out called Amazon Go Grocery in February 2020 in Redmond, Wash., a suburb east of Seattle. But it closed that location last year and ditched the Amazon Go Grocery brand.

There are still five Amazon Go locations in Seattle, and numerous stores in Chicago, New York City and Southern California.

Amazon said it is working with employees affected by the closures to identify new roles within Amazon, including at other nearby Go stores or at Amazon Operations sites, such as fulfillment centers.

Source: https://www.geekwire.com/2023/amazon-closing-eight-amazon-go-convenience-stores-in-latest-tightening-of-its-physical-retail/