Rumor: is Amazon planning to open hundreds of brick-and-mortars?
I’m a former manager of a brick-and-mortar bookstore. I also managed a game store, worked in a Nature Company type store, and my first real job was in a novelty store.
I think I can safely say that I was a successful manager, and I think I understand something about the physical retail business, even though I haven’t been in it (except as a customer) for some time.
I was intrigued when Amazon recently opened one physical bookstore in Seattle, which I wrote about here:
Who would be foolish enough to open a new brick-and-mortar bookstore in the Age of Amazon? How about…
Well, yesterday (on Tuesday), General Growth Properties’ CEO (Chief Executive Officer), Sandeep Mathrani, answered a question in a way that suggested that Amazon might open hundreds of brick-and-mortar stores (possibly in malls).
That statement has been walked back a bit, but many analysts saw this as responsible for a deep drop in Barnes & Noble stock since the announcement (it’s down about 15%).
Do I think this is true, that Amazon is going to open hundreds of stores?
It’s possible…we’ve had these kind of leaks before that then became reality.
There has been speculation about them being much more than bookstores…maybe a place to do physical returns, for example.
I can see Amazon doing “showrooms” for books and devices, similar to the current store in Seattle.
I have a hard time seeing them doing anything close to a department store.
I don’t think that’s a good model for success in today’s world.
When you run a retail store, you are constantly fighting the rent (if you don’t own the building…which has its own complications, including property taxes).
I just don’t see it working for Amazon to have a store with 25,000 item in it. That would be a tiny fraction of what’s at Amazon.com. You can’t have people comparing what’s in the store with what’s online.
This is what I think they could do:
Showcase books, like they are doing in Seattle
- Show off Amazon devices, which might include simulated rooms, like you can see in some electronic stores
- Amazon lockers, where you pick up some things you order online before you get there
- Have a Fed Ex store part of it, to handle returns, but whatever else you wanted to ship
- Maybe have a print-on-demand machine, to do print books
- Perhaps have a sort of test kitchen/coffee place, but I’m not sure about that. It would help them to have people try some of the things online
- Amazon’s “home of tomorrow”, showing off possible future things, including doing focus groups
- Author talks by Kindle Direct Publishing/Amazon imprint/Amazon independent paperbook authors
That could all make it an experience, a destination…and they really wouldn’t need to sell much in the store to have it as a driver of sales to the website and as a place for conversation.
I think, though, that most likely we would see an expansion of the Amazon Books concept first. I think they will continue to experiment with locker locations, but those two don’t necessarily go together.
Would this be the final straw for Barnes & Noble and perhaps for Books-A-Million, as some investors and writers seem to think?
I don’t really see it as the same space, as a head-to-head competition. What they would do would be very different.
I also don’t see it as having a huge impact on independent bookstores…again, different lanes.
Now, if Amazon wanted to open used bookstores, fed by their third party sellers…that would be a crushing blow for many smaller used bookstores, where there isn’t a whole lot of customer service. Stores with great customer service or other unique experiential elements would be unaffected.
I would like to see Amazon expand Amazon Books. If there was one in my area, I’d go to see it.
My intuition is that this CEO didn’t make it up out of whole cloth…that Amazon has been kicking around the idea, and perhaps has talked to malls.
As to it actually happening?
Um…I’d say I’m about 55/45 in favor of it being in the works, with us seeing the start of it this year.
I also think we need to consider that they would do it extensively outside the USA before they would do it here. There are markets where Amazon could really fill a need by opening physical stores.
Update: nice, informative
about the Amazon team involved with the brick-and-mortar retail effort. It does suggest that there could be some stores this year, perhaps eventually adding up to hundreds of stores…which is what I was trying to indicate by us “…seeing the start of it this year”.
What do you think? Does it make sense for Amazon to have hundreds of brick-and-mortar customer-frequented locations (as opposed to fulfillment centers and such)? If they did, what should they have in them? What impact would it have on existing brick-and-mortar stores? Feel free to tell me and my readers what you think by commenting on this post.
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