Dive Brief:

• Amazon will close its two brick-and-mortar Amazon Style stores in favor of focusing on its grocery and online fashion operations, the company said by email Thursday.
• Both stores will close by Nov. 9, and Amazon is working with affected employees to find them other roles within the company. If they don’t stay, employees will receive severance and career transition services, the company said.
• Last year, Amazon shuttered all its stand-alone bookstores and other non-grocery stores. On Thursday, the e-commerce giant said that physical retail remains important, noting its grocery expansion.

Dive Insight:

Last year, as Amazon abandoned its bookstores and 4-star stores, it pointed to its plans for Amazon Style stores as evidence that it still values brick-and-mortar retail. Now the company has sharpened its focus further, mainly on grocery.

“After careful consideration, we’ve decided to close our two Amazon Style physical retail stores and focus on our online fashion shopping experience, where we’re offering new, exciting selection at great value and introducing innovative technology to meet the needs of every customer,” Amazon spokesperson Kristen Kish said by email. “Physical retail remains an important part of our business, and we’re continuing to invest in growing our grocery stores business, which spans Amazon Fresh, Whole Foods Market, Amazon Go, and third-party partnerships.” 

Amazon Style locations featured technology that provided customers with suggestions based on their preferences, which promised to differentiate it from many traditional clothing retailers. But as they opened, some experts warned that running a specialty apparel store is even more complicated than other segments. Critics found Amazon Style confusing or otherwise less than ideal for shopping for clothes.

GlobalData Managing Director Neil Saunders in emailed comments called the tech “an over-engineered solution in search of a problem,” adding that the stores suffered because they lacked a point of view — something that traditionally has been necessary to attract loyal customers — despite having well-designed interiors and selling good brands.

With just two stores in the fleet, the closures aren’t major, according to Saunders. “However, it is symbolically significant in that it represents another retreat from physical non-food retail following last year’s closure of Amazon Books and Amazon 4-Star shops,” he said, adding that the move makes sense, because its online fashion enjoys “considerable success” without stores.

In its email Thursday, Amazon noted that it continues to expand its fashion and beauty assortment, recently introducing Coach and D’Amelio Footwear, as well as an expanded collaboration with Victoria’s Secret. The company said it also continues to invest in the tech side, including virtual try-on services and fit recommendations. Amazon Try Before You Buy also allows customers seven days to try items at home and pay only for what they keep.

The renewed focus on its grocery fleet will be necessary in order to add to the “very good progress in grocery” and better compete with mainstream grocers, according to Saunders.

“The freeing up of resources from ventures with less potential will allow Amazon to keep investing and expanding as it seeks to crack the grocery nut,” he said.