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Photo: Amazon

For a third-straight year, U.K. retailers celebrated Black Friday wildly, and Amazon dived into the spirit, deploying a five-room, 3,000-square-foot pop-up shop in London's Soho square.

Why it matters: Retail start-ups, e-commerce outlets, and brands are increasingly looking to pop-up stores as a means for driving sales and creating brand awareness. PopUp Republic, a services provider for the pop-up industry, estimates that broadly measured, these stores generate $50 billion in sales in the U.S. annually.

Amazon has opened dozens of smaller pop-ups across America this year, aimed at showcasing its hardware products, like the Kindle Fire. But this was the first in Europe, and, according to Alvaro Morilla, an analyst with Kantar Retail, it hints at a new model for how e-commerce companies will test products, learn about consumer tastes, and burnish their brands.

Amazon's London pop-up is not about capturing traditional retail sales at all.

  • Amazon furnished the entire townhouse to look like a family home, with Amazon products strategically placed in rooms where they would be used.
  • "With no checkout point at the store, Amazon was clearly trying to make this about having fun," says Morilla, who argues that Amazon's goal is not to generate in-store sales, but to "create retail theater and hospitality," and encourage shoppers to buy via its increasingly popular smartphone app.
  • "All the staff we spoke to were helpful, and more interested in creating an experience and guided shop over actually 'selling,'" says Morilla.

Why it may be the future of retail:

That Amazon tested this high-concept pop up in the U.K. makes sense, says Morilla, given that in the UK, more than 90% of population has a smartphone, versus just 77% in the U.S.

  • As smartphone penetration rises, and they account for a rising share of e-commerce traffic, on-line retailers will need to market to customers in the physical world to encourage them to make impulse buys on their devices as they go about their day.
  • In China, where mobile shopping is even more popular than in Europe and the U.S., Alibaba is testing a "New Retail" program, where it mimics its online revenue model in the offline world, charging third-party sellers for premium placement of products in pop-up stores and its growing stable of permanent retail spaces.

Go deeper

Democrat Mark Kelly sworn in to U.S. Senate

Photo: Courtney Pedroza/Getty Images

Astronaut Mark Kelly (D) was sworn in to the U.S. Senate on Wednesday after defeating incumbent Sen. Martha McSally (R-Ariz.) last month for the seat once held by the late Sen. John McCain.

Why it matters: Kelly's swearing-in by Vice President Mike Pence narrows the Republican majority and moves the Senate balance to 52-48.

Senate Armed Services chair dismisses Trump threat to veto defense bill

Sen. Jim Inhofe. Photo: Anna Moneymaker/Pool/AFP via Getty Images

Sen. Jim Inhofe (R-Okla.), chair of the Senate Armed Services Committee, told reporters Wednesday that he plans to move ahead with a crucial defense-spending bill without provisions that would eliminate tech industry protections, defying a veto threat from President Trump.

Why it matters: Inhofe's public rebuke signals that the Senate could have enough Republican backing to override a potential veto from Trump, who has demanded that the $740 billion National Defense Authorization Act repeal Section 230 of the Communications Decency Act.

Scoop: Uber in talks to sell air taxi business to Joby

Illustration: Sarah Grillo/Axios

Uber is in advanced talks to sell its Uber Elevate unit to Joby Aviation, Axios has learned from multiple sources. A deal could be announced later this month.

Between the lines: Uber Elevate was formed to develop a network of self-driving air taxis, but to date has been most notable for its annual conference devoted to the nascent industry.