When physical stores close, Amazon benefits

Online stores are benefitting from the lack of showrooming, the art of shoppers comparing prices in physical stores and buying the best-priced product online.

Amazon particularly has flourished in the first quarter of 2020, with sales soaring 24 percent, its biggest increase in four years. While other retailers may be stumped with supplier and warehouse closures, Amazon has managed to continue deliveries, becoming an essential etailer while its competitors in brick-and-mortar are shut.

As thousands of chains and independent retailers remain closed, shoppers are turning to the online giant, even for fashion. Bloomberg reports that before the pandemic 45 percent of brands didn’t sell products on Amazon, according to a survey conducted by Feedvisor. Furthermore, over one-third said they didn’t need Amazon to reach customers. Many brands and wholesalers have avoided selling to Amazon because the platform was incongruent with luxury brand strategies and lacked the elan to sell high-end products. Others are concerned about margins and Amazon copying products to sell under its own labels.

But in times of crisis, Amazon has been an essential player, delivering household items and clothing when other retailers were off the grid or forced to suspend operations. Bigger brands, who’s stores are closed, are eyeing behemoths like Amazon as a potential sales channel. In market terms, physical store closures only strengthen Amazon’s position.

Image via Amazon Facebook; article source: Bloomberg