Is Amazon Going In Reverse?

May 26th, 2017   |  

Online Retailers vs. Brick and Mortar

The history of the bookstore has had its ups and downs. Not a fairy tale, to be sure. In the 1990’s, the independent book stores were very concerned about the big chains like Borders and Barnes and Noble. Then, as fate would have it, the big chains were threatened by the online retailers – namely, Amazon.

Borders Books closed for good, and Barnes and Noble closed dozens of stores. Meanwhile, Amazon’s sales soared through its proverbial roof.

How many brick and mortar bookstores can you name?
More than 10?
How about five?
Okay, we’ll settle for three.
Hmm. Still can’t do it?

Online Retailers Take Control

Today, Amazon is often thought of as the premier online site for purchasing books, electronics, tools and many, many other products. They’ve revolutionized the concept of shopping and purchasing items on the internet, and even transitioned many paperback readers to using tablets and downloading electronic books. So, what new, cutting-edge experiment is the Information Age sensation, Amazon, conducting right now?

Amazon has opened its first retail store!

Yep . . . Amazon just opened the doors to a brick and mortar store in Seattle, Washington.

At first thought, it almost seems as technologically puzzling as trading your mobile phone in for a landline that’s attached to a long, wiggly cord.

Why would a company that’s largely responsible for dissolving traditional bookstores be interested in trying out such an old-school approach?

Many analysts and critics are baffled by the move, and the full strategy and economics behind the Amazon retail store is left to speculation. However, there are some key developments and statements delivered by Amazon that provide some insight.

The store is built from an extensive collection of data

The Vice President of Amazon Books, Jennifer Cast, recently declared the store as a “physical extension” of Amazon, and further stated: “We’ve applied 20 years of online book-selling experience to build a store that integrates the benefits of offline and online book shopping.” Digging deeper, what this means is that the company has attempted to use the online information gathered over the past two decades – sales numbers, purchasing habits, ratings and reviews, etc. – to create a new physical selling platform.

In fact, Cast later confirmed that all inventory in the store was carefully selected after analyzing desirability by consumers. Books available for purchase in the store have an average rating of 4 or higher (out of 5), and many are award winning publications.


Image is from Amazon.com’s Amazon Books in University Village, Seattle.

You won’t find price stickers on the products

All books and hardware sold in the store can be found on the website for the same price. Retail store shoppers are actually encouraged to take the books they hold in their own hands and then locate the title on Amazon’s app. Pricing for any product showcased in the store can only be obtained by using the app or an in-store scanner.

This integration of online tools with an offline experience may seem like a hassle, but further consideration for Amazon’s platform brings their marketing intentions into the light. A customer that uses the app to check pricing information is not only exposed to a second Amazon purchasing mechanism, but they are also provided with suggestions for purchasing other products. When a consumer checks the price of one product, and reads “you can buy this and others like it,” Amazon has immediately opened the door to other – perhaps even several – selling opportunities.

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Image is from Amazon.com’s Amazon Books in University Village, Seattle.

Do the sales numbers at the physical location even matter?

Physical copies of books are a shrinking market, and Amazon’s expertise is strictly associated with the ability to sell online. This leads many speculators to believe that the new brick and mortar location is nothing more than a new attempt to market Amazon.com and push new audiences to shop on their site. The highest goal for Amazon in this experiment may not be directly related to sales and profit. Instead, Amazon may be using this opportunity to gain further insight into consumer purchasing dynamics. For example, Amazon can discover the answers to some of these challenging retail questions:

  • When consumers physically interact with products, how will they engage with a website or app that provides the same product information?
  • Does a physical presence significantly contribute to brand loyalty?
  • What types of books or items will consumers prefer to buy in a physical retail store versus online?

Answers to these and many more questions could help Amazon perfect their sales models.

Amazon has also implied that if the organization achieves its goals with this first retail store, it will certainly consider expanding them around the world. Many international consumers are not acquainted with Amazon or even purchasing books and supplies online. A physical store where new consumers can walk around, learn about the company, and explore the e-book technology could prove to be an impactful introduction.

Redefining the bookstore of the future, again and again.

A retail store for Amazon may seem like a big step in reverse, but there’s a curious plan in the works. In the coming years, it will be interesting to learn about Amazon’s original intentions for this experiment.

Ironically, it’s quite possible that the sad and empty Borders store down the street from you is being renovated, and the sign in the window reads “Amazon Retail – Coming Soon!”

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