Why is Amazon opening a brick and mortar bookstore?

Discussion
Nov 03, 2015

Amazon.com has long been in the business of putting brick and mortar bookstores out of business. So why would the e-tailing giant now decide to open its own store inside a mall?

Amazon Books, the name of the store, will open at 9:30 a.m. Pacific this morning at University Village in Seattle. The new store will stock between 5,000 and 6,000 titles selected, according to a letter by Jennifer Cast, VP, Amazon Books, "based on Amazon.com customer ratings, pre-orders, sales, popularity on Goodreads, and our curators’ assessments." Most of the books have received a rating of four stars or higher on the site.

While rumors that Amazon would open a brick and mortar bookstore have been around for years, now that it has finally done so, it begs the question, why? According to a Seattle Times article, Amazon believes the data insights it has developed from selling books online can help the retailer avoid stocking titles that will sit on the shelf collecting dust.

Prices at Amazon Books will be the same as those online. Books will face forward and under each will be a card that provides its Amazon.com rating along with a review. Being Amazon, customers have the option of buying a book in the store and leaving with it or ordering it online and having it shipped.

Amazon Books interior

Photo: Amazon

Amazon Books will also serve as a showcase for Amazon devices, including Kindle, Echo, Fire TV and Fire Tablet.

Now that Amazon has opened its first bookstore, another next question is, will there be more?

"We’re completely focused on this bookstore," Ms. Cast told The Seattle Times. "We hope this is not our only one. But we’ll see."

Why do you think Amazon.com has opened Amazon Books? How well do you expect the store to perform compared to established physical booksellers?

Braintrust
"Amazon would be better off partnering with a brick-and-mortar retailer (Walmart, Target) to help them stock the right books on their shelves. Except none of those companies would show any interest in working together."
"Simple. Sell more books and mainly use it as a marketing tool. Amazon Books will soon begin promoting book signings by much loved authors in each store’s specific region. Note: Some authors will be brought in by large drones."
"Amazon is great but it can be (and it will be) even better once they master the brick-and-mortar world as well."

Join the Discussion!

29 Comments on "Why is Amazon opening a brick and mortar bookstore?"

Notify of

Sort by:   newest | oldest | most voted
Zel Bianco
BrainTrust

I can see a brick-and-mortar location working as a show room for Amazon devices, but I can’t see Amazon Books being a success. These days, people who leave the house to buy books generally want the experience of browsing shelves, talking to a staff member who can give them a personalized recommendation (very different from ratings on Amazon) and supporting a smaller, local retailer. By operating as a real-life version of the Amazon Top Rated lists, Amazon Books would be redundant and not serve the right customer.

Amazon would be better off partnering with a brick-and-mortar retailer (Walmart, Target) to help them stock the right books on their shelves. Except none of those companies would show any interest in working together.

Ken Lonyai
BrainTrust

This doesn’t seem like any “biggie” given the e-tailer’s willingness to foray into all types of ventures. In fact, compared to something like drone delivery, this move is rather easy to pull off.

Not knowing the details of sales volume of the last large competitor (Barnes & Noble) vs. Amazon for popular book sales, I would imagine that they’ve calculated that there’s room to out-compete their smaller rival and mom and pops as well (some of which may be hammered again by this development).

Not sure about the card under the books. It seems like a nightmare to keep current when there is technology to easily manage that kind of info in real-time.

Max Goldberg
BrainTrust

I think Amazon Books will perform as well as other bookstores, but I have to wonder why Bezos and Co. decided to make this move. Whether it succeeds or fails, Amazon has little to lose.

Joan Treistman
BrainTrust

It’s a good experiment to see if profitability can be enhanced by stocking best sellers. Amazon may be focused on optimizing the bottom-line and not as concerned with top-line revenue.

For me the big deal in the announcement is that books will be facing forward. I think the ease of reading titles and authors will help stimulate sales. And of course it will help shoppers avoid those neck aches from trying to keep their heads at 90 degree angles.

The card underneath explaining the book’s position in the marketplace and reviews make it seem more like a curated wine shop. This promises to be a fulfilling customer experience.

Tom Redd
Guest

Simple. Sell more books and mainly use it as a marketing tool. Amazon Books will soon begin promoting book signings by much loved authors in each store’s specific region. They have the data and know what people in each store region read. They will tune the mix to each region and use author visits and signings as a promotional tool for Amazon — the brand.

Note: Some authors will be brought in by large drones.

Peter Fader
BrainTrust

I’ve said it before and I’ll say it again: virtually all retailers should have a brick-and-mortar presence.

It all comes down to AEIOU:

  • A: Advice, which is always delivered better in person than online;
  • E: Experiential value — way more than just product selection and low prices;
  • I: Interaction with real humans, which is often (but admittedly not always) a good thing;
  • O: Opportunities for much more meaningful/successful cross-selling;
  • U: Understanding — traditional retailers should be in a better position to capture relevant data about buying/browsing habits than any online rival.

Amazon is great but it can be (and it will be) even better once they master the brick-and-mortar world as well.

Mohamed Amer
BrainTrust

With an eye to avoid perceived retail inefficiencies and cost structure, Amazon pioneered the online shopping experience without any physical stores. Starting with the original core business of selling books, it was relatively easy to create an online experience where you can browse pages, read reviews and have certainty in delivery performance.

This initial store reflects an internal belief that a more complete customer experience can be achieved by including the physical store in the mix. By limiting inventory to the top-rated books, Amazon avoids certain inventory risks and provides instant gratification of owning a physical book while giving its own Fire and Kindle devices a controlled stage. Amazon continues to behave like a serial start-up, and that means taking forays into areas that others see overly risky. That’s how they learn and adapt.

I expect Amazon Books to perform better than other book stores. Just as traditional retailers are dialing up their online presence and creating seamless experiences for their customers, there’s no reason why Amazon can’t test and selectively add Amazon Books into their network. Customers love having options, this is one more!

Richard J. George, Ph.D.
BrainTrust

Amazon continues to experiment with every conceivable method of getting product to customers quickly and conveniently. This bookstore test is no different in that regard. However, it is still significantly different from traditional bookstores in that all covers face out with accompanying reviews. In addition, the selected titles incorporate the data from thousands of Amazon buyers/reviewers, thus limiting the potential for shelf warmers.

I see an analogy between Amazon Books and Apple Stores. It will be a showcase store and potential draw for new and existing Amazon customers. If the store stays true to its mission the probability of success will increase. Amazon needs to be careful not to lose this focus and competing bookstores should not underestimate the power of Amazon when operating in their physical world.

Dave Wendland
BrainTrust

It’s simple, having a physical presence will enhance virtual storefronts. Why? Because offering the ubiquity that a true omnichannel experience offers demands brick-and-mortar. It also demands mobile, web and whatever the future may hold (e.g., hologram storefronts in a consumer’s living room!).

I think it is wise for Bezos to test this and then, if proven successful, refine the model before rolling it out to other locations. Eventually I anticipate seeing more and more online retailers venture down this same path. (Personally, I don’t think Zappos has abandoned its exploration of pop-up stores and physical storefronts.)

Lee Peterson
BrainTrust

I guess to show physical stores how it’s done! Reviews under the books and a search engine — duh! It’s almost a little wink, like, “Hey, try this, dinosaurs!”

Herb Sorensen
BrainTrust

Very simply because Amazon intends to “own” ALL of retail, and may do, in a brick-and-mortar store, what other retailers simply refuse to do. Notice Walmart, who is in a terribly vulnerable position (see: “The Problem: ‘Parked’ Capital“) is turning to its suppliers for funding to bail it out of its looming disaster. Meanwhile, I’ll visit this Amazon brick-and-mortar store to see if they really are “Selling Like Amazon … in Bricks & Mortar Stores!” 

Patricia Vekich Waldron
BrainTrust

I wonder if this is a first step towards setting up a store experience modeled after Apple Stores. Selling books — though having them placed with the title facing shoppers is helpful — will not significantly improve their position (or profits).

I expect Amazon to turn this store into a showroom where they can create more interactive, signature experiences and promote Kindle and other new products. It’s more an opportunity to give customers hands-on experiences than to sell books.

Ed Rosenbaum
BrainTrust

First, Amazon has nothing to lose by opening brick-and-mortar locations. But why? They have successfully taken over the sale of books online. So why add the expense incurred by brick-and-mortar such as rent, electricity, etc., when it is not going to truly improve an already good bottom line?

Brian Kelly
Guest
1 year 7 months ago

Many pure plays have opened physical stores. Just like Microsoft opened stores. For human contact and the learning opportunities that come from user engagement.

There is a bit of going back to the future to speak to the store’s performance. Recall the halcyon days of Borders and B&N. What allowed those category killers to disrupt? In-store shopping experience, available inventory and price. Some remain community gathering locations. Now add to that the Big Data of multiple channels of engagement.

Amazon invented/owns “long tail” supply chain, so inventory aging is covered. What is Macy’s calling stores, DCs? And Bezos needs to sort out how to sell “devices aka IoT.”

So this store, like all stores, is a laboratory. A place to learn and get smart on running a store.

Welcome Amazon. Or as we like to say, “retail ain’t for sissies!”

Peter Charness
BrainTrust

About as well as any other physical book store. Browse the books, scan and download to your reader app. I was actually expecting Amazon to open eclectic assortment bargain basement stores to support the reverse logistics of returns. Get the product available for sale as quickly as possible.

Shep Hyken
BrainTrust

This is interesting. I heard it might happened and often speculated why. There is a place for brick-and-mortar bookstores. With the data that Amazon has on what’s selling and what’s not, they should become the case study for inventory management. That could translate to success.

This is an effort that has minimal downside for Amazon. A minor investment to test the concept. It will be interesting to see how this works.

Scott Hooten
Guest
Scott Hooten
1 year 7 months ago

Amazon has a great brand and the physical store is a great way to expand on that great brand of amazing service. I’m sure that the other motivation is to get customers to interact with Amazon devices and build a better brand around those. Online reviews have not been kind to most Amazon hardware, so this is a way to combat that.

I foresee an Apple Store-like rollout in the years ahead.

Naomi K. Shapiro
Guest
Naomi K. Shapiro
1 year 7 months ago

It ain’t about the books, it’s about being “a showcase for Amazon devices — including Kindle, Echo, Fire TV and Fire Tablet.” Like Apple Stores, what better way to bring in customers and potential customers to play with and put hands on the devices, buy them … and then order the books!

gordon arnold
Guest

I can easily see a chain of stores for Amazon’s retail expansion. They may evolve or transcend to something other than books, but they will nevertheless continue to exist. The last several years have seen Amazon’s growth decline to single digit levels. This is largely due to the relentless pursuit of e-commerce expansion from both new ventures and the strongest of the B&M retailers. While the e-commerce business is cheap to own, it has severe limits in what it can do for the consumer. This coupled with Amazon’s inability to stay fresh for the expanding e-commerce crowd is making a B&M move more and more necessary. The fact that they are turning to books is a clear demonstration of just how little they know about B&M retail. Not a good sign for the long-term investor when added to the recent disappointments they own.

Li McClelland
Guest
Li McClelland
1 year 7 months ago

Amazon’s online book sales succeeded from the very start because they could offer broader selection and better prices than any bookstore on the planet. Now with their brick and mortar establishment they will enter the fray that other bookstores have been encountering for decades: High property rental/lease costs in good locations, significant security and property maintenance costs, and front-line employee costs for sales and stocking. How can this possibly work?

This is nothing like an Apple store where hands-on playing with the product by customers is important if not essential, and where the profit is huge on each individual tech item sold.

Matt Schmitt
BrainTrust

Why a physical store? Because customers like them. Why enter a market that they helped destroy? Because the traditional physical bookstore brands had trouble with logistics, pricing pressure, and margin controls. Amazon believes they have these things figured out. So give the people what they want. Digital and physical. They’re now a complete retail brand.

Craig Sundstrom
Guest

“To get to the other side.” Oh, sorry: answer to another question about seemingly meaningless activity. But of course this isn’t meaningless; it’s done for the same reason as many — most — of Amazon’s innovations, a “throw-it-to-the-wall-and-see-what-sticks” philosophy, which, if nothing else, will generate publicity. And it works … the publicity part, that is.

As for a chain, we might see a few more, until people stop writing stories about them, and HQ moves onto the next 9-day wonder.

Lee Kent
BrainTrust

While I totally see Amazon having a Brick and mortar presence, a book store? Not so much.

What I do trust is that Amazon will experiment with the concept and learn from their mistakes. With that in mind, I see this store likely turning into something else entirely.

But that’s just my 2 cents.

James Tenser
BrainTrust

We Amazon-trackers have been expecting this for years, haven’t we? A physical book store may augment its larger strategy, but it does not change it.

An urban storefront provides Amazon with a brand showcase and a place for a tiny fraction of its customers to interact with humans. Not to mention a must stop for best-selling authors on their book tours. I’d anticipate more of these in major markets. Even if they are barely profitable, they would deliver big marketing value at a low net cost.

I envision the tenants along the Magnificent Mile and Fifth Avenue of the future: Apple, Microsoft, Nike, AT&T, Verizon, Comcast, Zappos, Blue Nile … Amazon just has to be a presence if it wants to be a dominant retail force.

Giacinta Shidler
Guest
Giacinta Shidler
1 year 7 months ago

I’m a little baffled by this. Sure there is plenty of potential in a brick & mortar experience, from knowledgeable and friendly staff, to physically interacting with product, to creating a unique customer destination. But I would not have picked books for the venture. There are many products that, to me, have more potential upside in selling via a store experience versus online. There are many products that people would prefer to handle, feel, try before they buy them. To me, books just don’t meet that bar. Shopping online with Amazon for books (physical or digital!) is incredibly simple and streamlined. I don’t see the value-add in Amazon offering them in a physical location.

Karen S. Herman
BrainTrust
Since Amazon has so much data to play with, why not use it as the catalyst for their first brick and mortar storefront? Offering popular books rated 4 stars and above by Amazon.com users along with books selected by company curators gives shoppers a chance to browse, learn more about popular titles, and buy or order online. The opportunity to play with products and seek guidance from a device expert is a play straight from the Microsoft mall Pop-Up playbook and Samsung Experience Shops. As such, Amazon Books would have been a fantastic Pop-Up Store experience. As a brick and mortar destination, I feel that what is missing is a deeper and broader in-store experience. For example, when I think of visiting Barnes & Noble, I get a warm and fuzzy feeling because I can grab a coffee, find a comfy place to browse my favorite magazines, discover random books as I walk through various sections, and more often than not, pass through the children’s area to remember special times I had with my kids. For me, shopping at Barnes and Noble is a destination experience that I plan for and look forward to enjoying. I’m thinking Amazon Books may… Read more »
Arie Shpanya
Guest

This is a genius idea. Amazon is always on the front lines trying out anything and everything that could potentially boost sales and loyalty. I think this one could stick because it eliminates many of the current issues associated with the brick and mortar selling and buying experience.

1. It can ship books easily to shoppers who don’t want to lug them home.

2. It has vast rating and review data to give shoppers additional reasons to buy the books.

3. It has the same price as Amazon.com, so no need to showroom.

4. It incorporates online sales data to stock the right books.

I look forward to seeing the outcome of this experiment.

Rajesh Patil
Guest
Rajesh Patil
1 year 7 months ago

The bookstore is just an extension to satisfy the heptic experience, the touch and feel effect of buying anything. Amazon is synonymous with books, the brand will create a better pool effect and the pricing and rating shown will help to push, overall a very smart move. Well done Amazon, you will now be able to challenge the real retailer.

I hope you employ more technology and make a complete omnichannel experience for the buyer. This will help to satisfy both the print and virtual readers.

Matt Talbot
BrainTrust

The opening of Amazon Books allows the e-commerce giant to achieve a couple of initiatives that are not feasible online. First of all, it is a great play for them to showcase their devices like the Kindle, Echo and Fire items. It is one thing to read reviews of these products online but it is much more appealing to engage with these products in a physical store. Consumers can now hold a Kindle and experience the user interface instead of guessing how it might work and feel by simply looking at it on Amazon.com.

Another benefit to opening a brick-and-mortar Amazon Books is to provide a very different customer experience for consumers that prefer to browse bookshelves, engage with store employees and get the immediate gratification of diving into the first chapter upon purchase. If a customer has a positive experience at Amazon Books, not only are they likely to return… they’re also more likely to buy from Amazon.com the next time they’re shopping online.

wpDiscuz
Braintrust
"Amazon would be better off partnering with a brick-and-mortar retailer (Walmart, Target) to help them stock the right books on their shelves. Except none of those companies would show any interest in working together."
"Simple. Sell more books and mainly use it as a marketing tool. Amazon Books will soon begin promoting book signings by much loved authors in each store’s specific region. Note: Some authors will be brought in by large drones."
"Amazon is great but it can be (and it will be) even better once they master the brick-and-mortar world as well."

Take Our Instant Poll

How likely is it that Amazon Books will grow to be a chain of stores over the next five years?

View Results

Loading ... Loading ...