Amazon is opening six pop-up stores throughout Europe under the banner 'Loft for Xmas', as the e-commerce giant wants to learn about the peculiarities of physical retail.
Learning about retail
The 'lofts' will open in Amsterdam, Berlin, London, Madrid, Milan and Paris on 16 November and close again on the 26th. Amazon mainly wants to sell toys and electronic devices. Apparel is part of the package as well, as the company could stand to learn a lot about that: "So far inconsistencies in colour, sizing and apparel attributes have undermined its private label apparel sales," says Joaquin Villalba, co-founder and CEO of Nextail.
Amazon already sells shoes and clothing by many well-known brands, but it also owns far more private labels than most observers thought: according to Coresight Research, 66 of Amazon's 74 private labels are in apparel. However, they perform far below expectations: of the ten worst-selling Amazon brands across all categories, nine were in women's and girls' fashion. In addition, 82% of Amazon's women's clothing brands sells fewer than a hundred units per month, according to research by Amazon seller data platform Jungle Scout.
Temporary stores are an ideal way to try out new markets, products or ideas for all retail players, whether they are store chains, brands or e-commerce companies. E-retailers can offer shoppers a rare opportunity to touch and feel their goods. For a company like Amazon, which has clear ambitions to expand its network of physical stores, the investments and planning required for pop-ups are more than worth it. Compared to a traditional shop, a pop-up is after all only a short-term investment that yields a lot of data.