Amazon Considered Opening Discount Stores for Electronics and Home Goods

The COVID-19 pandemic stalled efforts by Amazon (NASDAQ:AMZN) to open new retail stores that would sell discounted consumer electronics and home goods.

Bloomberg reported today the e-commerce giant had been looking into the new concept last year, but as the coronavirus pandemic worsened, it was forced to prioritize its employees to handle day-to-day demand and the launch of its Fresh grocery store.

Stacks of parcel boxes

Image source: Getty Images.

Aging inventory of unsold goods in Amazon warehouses had the internet retailer considering new physical store locations. It already runs a number of concept stores including Amazon Go convenience stores, 4-Star and Books specialty stores, and several Presented by Amazon locations. Of course, it also operates hundreds of Whole Foods Markets and has been opening Fresh stores regularly.

An anonymous source told Bloomberg the idea for a consumer electronics and home goods store was “a way to be able to clean out warehouses, and get through inventory without having to destroy it.”

Among the ideas discussed was also opening pop-up stores in parking lots to sell the goods (Amazon also runs a handful of stores called Amazon Pop Up). “It is keeping with the value proposition of Amazon, keeping price at the forefront and allowing customers to get access to products at low cost,” the source said.

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The discount stores would be similar in concept to the 30-store chain Amazon 4-Star, which carries a highly curated selection of goods across product categories that have typically been rated four stars or higher on the Amazon website.

While the idea was put on hold because of the pandemic, it’s one that could spring to life again at any time.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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