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Amazon Wants to Open Department Stores Now, Is It For Data Collection Though?

The first of these will open in California and Ohio.

Amazon.com Inc. is planning to launch large physical retail locations in the U.S. that will operate akin to department stores, selling everything from clothing to electronics, The Wall Street Journal reported. The first of these will open in California and Ohio.

The new spaces will measure around 30,000 square feet (2,800 sq m). This is far smaller than most department stores which typically take up about 100,000 square feet (9,300 sq m) but that does not mean they won't be disruptive.

According to Gizmodo, the new openings are all about data collection, of course, there's also the obvious motive of offering brick-and-mortar service. Amazon lags far behind Facebook and Google when it comes to user data collection and that's something the tech giant aims to change.

A physical store will allow Amazon to see exactly which products you prefer: Which you buy and which you leave behind. An anonymous source told The Wall Street Journal that the new stores are about better engagement with customers but that seems hard to believe.

If we take a look at how Amazon shows up on the news about the way it treats its employees, it appears plausible that data collection is the reason behind the physical stores. The question now becomes, will the stores prove successful?

Since they will be smaller than your typical Macy’s or Target, they may not be able to compete with the huge players. However, they are about in line with recently opened department stores from Nordstrom which makes them viable sources of retail.

And that's not all. In June, reports started showing up that the tech giant was going to open its own Amazon-branded physical retail pharmacies. 

In 2018 it bought PillPack, a company that helps customers track their prescriptions, and in late 2020 it officially launched its Amazon Pharmacy business, which enables Prime members to save up to 80% off generic medication.

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It seems the tech giant will not be satisfied until it dominates every area of retail.

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