Retail Pulse: Amazon Grows 4-Star Footprint; Forever 21 Files For Bankruptcy

Online retailers are expanding their brick-and-mortar footprints – and using feedback from eCommerce customers to inform the selections in their new stores. Amazon, in one case, has added a suburban Boston location to its roster of Amazon 4-star stores, marking the fifth location of its type in the United States.

The Natick Mall store carries products that are top sellers or new and trending on Amazon’s website. And, true to the name of the store, each product is rated four stars and higher by shoppers on a five-star scale2. There are also digital price tags for every item, and Prime members can pay the discounted online price for their selections at the store. A data team from the eCommerce retailer determines what is sold at the locations, Amazon Physical Stores Director Drew Sheriff told MetroWest Daily News.

Sheriff told the outlet that the company chose to put a 4-star store in Natick due to the location of the mall and the large volume of consumers it attracts. Amazon views the store as a complement to its site. Sheriff said, according to the report, “We want to meet customers where they are. People love to shop in stores, and that is not going away.”

Amazon is not the only eCommerce retailer that has taken this approach in the Natick Mall. Wayfair also recently opened a store there, where consumers can experience its products firsthand.

The first Amazon 4-star location opened in New York City last September, followed by Lone Tree, Colorado, Berkeley, California and Seattle, Washington. In a blog post last September, the eCommerce retailer said, “We created Amazon 4-star to be a place where customers can discover products they will love. Amazon 4-star’s selection is a direct reflection of our customers – what they’re buying and what they’re loving.” Items were to span some of the most popular categories on Amazon, including books, kitchen, home and games, among others.

Beyond the 4-star concept, Amazon now reportedly has 16 Amazon Go stores and 18 Amazon Books stores. In fact, one of the Amazon Books stores is located close to Natick in another suburb of Boston, Dedham.

With an expanding roster of brick-and-mortar stores, Amazon is stepping further into the world of physical retail to showcase an array of merchandise in real life.

In Other Brick-and-Mortar News

Fast-fashion chain Forever 21 has filed for Chapter 11 bankruptcy. The retailer reportedly said it will shutter a large number of physical stores worldwide. The filing will let it continue operating while it attempts to reorganize the business and return to profitability. Forever 21 plans to close up to 178 stores in the U.S. and nearly all of its Asia and Europe locations.

The 35-year-old company has 815 stores spread across 57 countries, with more than 500 of them in the United States. The retailer has struggled with online competition and changing trends such as secondhand clothing and sustainable fashion. High rents from an aggressive physical expansion also have posed a problem. The used-fashion market in the U.S. is expected to reach $64 billion by 2028, per GlobalData.

On another note, vacancies in U.S. shopping malls have reached an eight-year high. Reis data indicates that the proportion of units sitting empty in some cities – with the inclusion of Indianapolis, Indiana and Birmingham, Alabama – is roughly four times higher than San Francisco. The Reis data examines 77 metro areas and indicates that 9.4 percent of units were empty in the third quarter, “equaling a post-financial crisis high reached in 2011,” according to reports.

And Simon Property Group has announced it is working with Rue Gilt Groupe to roll out a new site for deal-conscious shoppers. Simon has been increasingly exploring and testing the ShopPremiumOutlets.com site since March. The mall operator also noted it has signed on over 2,000 designers and has about 300,000 products. It reportedly doesn’t expect that this new offering will cannibalize its brick-and-mortar mall business.

Some of the brands that have signed on include Saks Off Fifth, Aeropostale, G.H. Bass & Co. Factory Outlet, Nautica, Cole Haan and Under Armour. Sandler O’Neill and Partners Real Estate Investment Trust Analyst Alexander Goldfarb said, according to reports, “Simon has definitely been upfront that they aren’t just going to sit on the sidelines and let the world move online and them not be a part of it.”

To keep tabs on the latest retail trends, check next week’s Retail Pulse.