Amazon Bookstores to Spread Coast to Coast – Is This Good or Bad for Booksellers?

- by Michael Stillman

F3fce0ea-6f4e-4e8a-ae44-c0138d212fff

An Amazon store (from Amazon website).

Amazon has announced the planned opening of four more traditional, bricks-and-mortar bookstores for later this year. They join three already open on the west coast, Seattle, Portland, and San Diego, and one previously announced, but not yet open, Chicago. Now, Amazon bookstores will be found coast to coast. Amazon has announced that they will take Manhattan, and three other locations, one across the river in Paramus, New Jersey, and two in the suburbs of Boston – Dedham and Lynnfield. How many they will eventually open is unknown, maybe even to Amazon, and certainly to everyone else. Some speculate hundreds, some thousands. Meanwhile, the motivation behind this move into traditional retailing, which elicited a "what-the..." response when first announced in 2015, is becoming clearer.

 

The bookstores will only generate peanuts in terms of sales for the mammoth online retailer. Still, there are some evident ulterior motives. The stores now offer Amazon electronic devices, such as its Kindle e-reader, tablet computer, and probably most important of all, Echo, its hands-free personal assistant. And maybe even more important, it enables Amazon to personally sell subscriptions to its Prime service, which, for an annual fee, lets you purchase everything from Amazon at a discount. If they can get you to pay for Prime, they know you will buy lots more from them over the course of a year.

 

Of course, Amazon began its existence as a bookseller. Once they became the largest online bookseller, they morphed into something much bigger, the largest online retailer of just about everything else under the sun. They didn't make much if any money, but they grew like Topsy. Books, in a sense, were a loss leader. Perhaps that is what they will be again. The bookstores will undoubtedly help drive traffic to the website, as well as making sales on the spot. And one more thing – as big as online shopping has become, and as huge as Amazon's market share of online shopping is, the reality is that more than 90% of merchandise is still sold through traditional retail. Their share of this 90% is 0%.

 

Amazon recently opened a test site for grocery shopping in its home town of Seattle. The catch to their concept is that products will automatically be scanned as you put them in your shopping cart, enabling shoppers to avoid check out lines. Amazon evidently has an eye on that other 90%.

 

What is the impact of all of this on booksellers? Those most in fear are the shops that sell new books, as this is where Amazon directly competes. Those in the rare and antiquarian trade don't seem so obviously affected, though Amazon's online model turned even the rare book trade upside down in the 1990's, so who knows where this leads?

 

However, some independent booksellers are starting to warm to the idea, and they have more to fear than rare book sellers. Amazon only carries a limited number of books on site. Their books are displayed face out, significantly reducing the number on display. Amazon uses online buying habits to pick the most popular titles to sell at each location. They offer the cream of the crop, but the independents can offer more variety and specialization. They also can give the browser a better experience thumbing through titles to find books of interest they never knew about before. The Barnes & Nobles of the world long ago took away much of their best-seller trade, so Amazon is likely to be more of a threat to these large retailers than to independents.

 

All of this brings us to one more factor which may make rare and antiquarian book sellers feel better about these Amazon stores. Many have believed their stock in trade, the printed book, is on life support, their demise being tolled by the beeps of electronic readers. Young people have less connection to the physical book than earlier generations, simply because there are alternatives available. Some may rarely touch a physical book. They can read books by downloading them onto an electronic device without ever knowing the sensation of a physical book.

 

In an Amazon store, even if they buy an e-book, they will not be able to avoid the presence of printed ones. They may be tempted to touch one, open it, experience what their forebearers did. You cannot experience invisible electrons dancing on a chip. Tomorrow's collectors almost inevitably will come from today's readers of physical books. Amazon stores may be where the young first come to experience printed books. Everyone is always asking from where the next generation of book collectors will come. Maybe Amazon stores will be one of the answers.