It is a strange sort of dichotomy that exists when physical stores are suffering all over at the hands of online stores. It seems to be a problem so inherent to physical stores that even retail giant Amazon’s (AMZN) own physical stores cannot keep up. Amazon is shutting down more physical stores, and shares were up nearly 1.5% in Tuesday afternoon’s trading.
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More specifically, Amazon is shuttering more Amazon Go locations, reports note. The stores, launched in 2018, have been having a tough time getting off the ground. The Amazon Go concept was largely supposed to be a showcase for some of Amazon’s best payment technology, including the Just Walk Out system that lets customers basically do exactly that, but with their purchases paid for.
And this is not the only issue, either. Amazon has launched, and subsequently closed, several physical retail ventures. The fashion stores, the bookstores—which is perhaps the greatest irony of all—and its various “4-star” operations that focused on selling top-rated Amazon items are all falling under the headsman’s axe.
That Matters Less Than You Might Think
If this sounds like bad news, it should. Even SiteWorks Retail president Nick Egelanian noted that “I don’t think they really understand retail.” And that actually does not matter. New reports suggest that Amazon sent out a whole slew of next-day or same-day deliveries in 2024. Here, “a whole slew” means “right around nine billion.”
Amazon itself noted that it boosted its number of same-day delivery sites 50% in 2024, and that the effort saved Prime members close to $95 billion in “fast, free delivery.” So the idea that maybe Amazon does not understand physical retail may not matter so much when it is so clearly nailing delivery and online ordering.
Is Amazon a Buy, Sell or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMZN stock based on 40 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 41.55% rally in its share price over the past year, the average AMZN price target of $261.21 per share implies 8.32% upside potential.
