The world is changing at a rapid pace.
Between rising costs, tariffs, an increasingly spread out population, remote work, and social media trends which seem to change on a weekly basis, keeping up with everything can feel like trying to hit a moving target.
This is especially the case for retailers, who have found the past five or so years have provided a difficult operating environment.
Two types of retailers have struggled in particular.
For one, smaller mom-and-pop shops have found it harder to operate in an increasingly competitive environment.
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Since 2020, the retail industry has contracted due to consolidation, whereby smaller businesses are gobbled up by larger corporate incumbents who have the cash flow to float businesses even when the economy takes a downturn or when interest rates go up.
Brick-and-mortar retailers have found it hard, too. As more shoppers prefer to seek their conveniences online, it’s become harder to justify keeping the lights on—literally and figuratively—for decreased foot traffic.
Image source: Spencer Platt/Getty Images
Amazon has seen some big changes
One interesting case is with Amazon (AMZN) , which saw considerable growth both during and after the pandemic.
There are over 200 million Amazon Prime members who pay the annual $139 for access to millions of SKUs and lightning fast delivery.
Amazon’s profits have grown about 200% since the onset of covid. But the retailer isn’t happy with growth for the sake of growth.
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“And at the same time we’re growing and inventing, we’re also continuing to make progress on our cost structure and operating margins, which isn’t easy to do. Overall, I like the direction in which we’re heading and appreciate the hard work and ingenuity of our teams globally,” CEO Andy Jassy said in a 2024 letter to employees.
Amazon continues to iterate
Amazon is known for its e-commerce prowess, but it has been trying to enter the brick-and-mortar space for years now.
The online giant has primarily operated two different models: Amazon Go stores, which function like convenience stores, and Amazon Fresh, which function more like grocery stores.
However, its brick-and-mortar efforts have yielded mixed results, and since opening, it has closed half of its total Amazon Go locations.
Now, Amazon has confirmed that it will combine its Amazon Fresh and Amazon Go operations.
The retail giant reportedly made the decision after determining several redundant roles in its Worldwide Grocery Stores division. It held calls with employees in late February to inform them they’d be let go.
Amazon has been struggling to get its grocery business underway. In 2023, it halted growth ambitions for Amazon Fresh stores and said it would not open new ones, citing market uncertainty.
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