Amazon Reportedly Plans to Open Hundreds of Physical Bookstores

Amazon Reportedly Plans to Open Hundreds of Physical Bookstores
What you need to know

Amazon reportedly plans to open as many as four hundred bookstores. This prompts many to ask why the company that destroyed the physical bookstore industry would possibly want to operate a physical bookstore and vigorously expand it.

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Compiled by Bing-sheng Lee

In November 2015, Amazon opened its first brick-and-mortar bookstore in Seattle. Now, according to Wall Street Journal, the online retail giant is prepared to open several hundred new physical stores across the country.

On February 2, Sandeep Mathrani, chief executive of mall operator General Growth Properties Inc. (GGP), said that the Seattle company plans to open as many as four hundred bookstores. An expansion of bookstores, which the company has not confirmed, would be a surprise reversal from the online retailer credited with driving physical booksellers out of business.

It hasn’t been confirmed how Mathrani obtained the number of stores Amazon plans to establish, but Wall Street Journal implies he could have spoken with Amazon’s real-estate executives about their plans. Spokesperson for Amazon and GGP have declined to comment.

Described as a physical extension of the online platform that provides Amazon customers with a place to leaf through books before buying them, Amazon Books offers titles that have been chosen based on the e-commerce site’s own customer ratings and sales. It is similar to a regular book retailer, except that it also sells devices like Kindle, Echo, Fire TV and Fire Tablet.

Another unique feature of the store is that none of the books on the shelves have prices. Instead, customers have to use an in-store scanner or the Amazon app to see how much a product costs since prices fluctuate based on how much the books cost online.

If Amazon were to open hundreds of stores, it would take years to pick locations, reach leasing deals and hire staff.

This prompts many to ask why the company that destroyed the physical bookstore industry would possibly want to operate a physical bookstore and vigorously expand it.

Photo Credit: Mozart Tan, Amazon Books

On February 2, Vox.com published an article explaining the reasons behind Amazon’s potential strategy. The article argues that Amazon is interested in bookstores for two main reasons:

  1. It has the ability to open bookstores.
  2. It is driven by a relentless desire to conquer everything in its path, and brick-and-mortar retail is a thing.

In addition, Matthew Yglesias, author of the article, mentions that as Apple, Microsoft, Sony and Samsung all have physical retail stores for its digital devices. It is reasonable for Amazon, which also makes its own electronic devices, to follow the suit.

Yglesias writes that Amazon’s long-term strategy is to make everyone from everywhere buy everything from Amazon. Despite the convenience and prevalence of online shopping these days, physical stores remain a place where some people make most of their purchases. While Amazon can overwhelm competitors with its vast online inventory, it still cannot rival the immediacy of shopping at the mall. As a result, Amazon may hope to tap into the area to expand its business.

Any move by Amazon to expand stores would further antagonize long-time rivals like Barnes & Noble Inc, the largest US bookstore chain, which operated 640 bookstores across the United States as of January.

Amazon has begun one-hour deliveries in about 20 cities and same-day drop-offs in other markets. At a handful of US colleges, Amazon has physical locations for students to pick up or drop off merchandise and speak to Amazon representatives.

In addition to the Seattle bookstore, Amazon footwear division Zappos and Quidsi, parent of Diapers.com, have experimented with US retail outlets.

Edited by Olivia Yang

Sources:
“Amazon Plans Hundreds of Brick-and-Mortar Bookstores, Mall CEO Says” (Wall Street Journal)
“Amazon is reportedly planning to open hundreds of bookstores. Here’s why.” (Vox.com)
“Amazon reportedly to open 400 book shops” (The Australian)
“Amazon plans hundreds of physical bookstores: WSJ, citing mall CEO” (CNBC)
“Amazon plans to open hundreds of bookstores, mall operator say” (The Guardian)
“Amazon plans to open up to 400 bookstores, says mall operator” (Reuters)
“The CEO of a mall chain says Amazon plans to open hundreds of physical bookstores around the country” (Business Insider)
“Amazon Considers Opening Hundreds Of Bookstores” (Forbes)