At Amazon’s bookstores, books are just window dressing – USA TODAY
SAN FRANCISCOÃ‚Â Ã¢Â€Â” Since Amazon opened its first brick and mortar bookstore in November, rumors have swirled about the Seattle online retailer’sÃ‚Â plans for more bookstores across the nation, with numbers between 10 and 400 outletsÃ‚Â bandied about.
Over the weekend AmazonÃ‚Â confirmed it plans to open a second bookstore in San Diego sometime this summer, making its march into the physical world of bookselling seem more real.
But is Amazon actually building bookstores?
“No,” says Rob Enderle, a tech industry analyst with the Enderle Group in Bend, Ore.
“The books are just window dressing,” he said.
Amazon’s using them to create a comfortable space for people to come in and get acquainted with its electronics offerings, he said.
At this point that includes the Kindle Fire tablets, Amazon Fire TV and Echo, its popular voice-activatedÃ‚Â personal digital assistant, music player and all-around shopping aide, which now also comes in two smaller sizes, the Tap and the Dot.
“A lot of people are intimidated by electronics, but they feel comfortable hanging out in a bookstore,” Enderle said. If they go into a Best Buy they worry they’ll be set upon by salespeople, but in a bookstore they feel safe.
That fits with John Mutter’s impression’s of Amazon’s Seattle store.Ã‚Â Mutter isÃ‚Â editor-in-chief of Shelf Awareness, a bookstore industry newsletter.
He found it striking that while there are bookshelves around the perimeter of the Seattle store, the middle was taken up with large tables displaying Amazon’s various electronicsÃ‚Â for people to touch and interact with.
“It definitely felt like the centerpiece of the store was the devices,” he said.
During the 45 minutes he spent observing the store, Mutter said he didn’t see anyone carrying any printed booksÃ‚Â and no one actually buying anything.
The Seattle store is about 5,500 square feet but carries only about 5,000 to 6,000 books, a 10th of the up to 50,000 to 60,000 volumes a normal bookstore that size would stock, Mutter said.
And unlike in a normal bookstore where the books are shelved spine out, as in a library, at the Amazon store the books are shelved face out, with lots of space between them.
“If you see a bookstore with the books face out, you think, ‘Oh no, their cash flow is horrible, they can’t afford to buy inventory,'” he said.
Instead, Amazon is announcing it will open a second store, although it’s been mum on the proposition otherwiseÃ‚Â except to say, “stay tuned for additional details down the road.”
Mutter says “good sources” in the book world put the number of projected Amazon brick and mortar stores at between 12 and 18.
That makes more sense than the close to 400 stores the CEO of mall operatorÃ‚Â General Growth Properties Inc.Ã‚Â Sandeep MathraniÃ‚Â had suggested Amazon might open. Mathrani dropped the number in an offhand comment duringÃ‚Â an earnings call in February but later backtracked.
What the stores offer Amazon is much more valuable than sales from a few thousand booksÃ‚Â Ã¢Â€Â”Ã‚Â a way to build its brand directly with customersÃ‚Â in face-to-face circumstances, said Charles King, principal analyst for Pund-IT, a tech analysis firm based in Hayward, Calif.
In that, Amazon is following a template that’s been extraordinarily successful for Apple despite early predictions of failure.
Ã¢Â€ÂœWith its targeted mostly urban outlets, Apple is able to showcase not only its devices but its brand to people who are its biggest fans. ThatÃ¢Â€Â™s builtÃ‚Â a level of customer loyalty thatÃ¢Â€Â™s pretty hard to surpass,Ã¢Â€Â he said.
The stores also give Amazon insight into how people actually feel about its devices and how they use them, something of enormous worth to retailers.
Ã¢Â€ÂœAmazonÃ¢Â€Â™s one of the smartest companies out there in relation to tracking user behavior and building future strategies around that,Ã¢Â€Â he said.
But most of allÃ‚Â Amazon is pragmatic, said King.Ã‚Â Ã¢Â€ÂœThis really smells like a pilot program that Amazon will continue and expand on if it succeeds,Ã¢Â€Â but it they fail, the company Ã¢Â€ÂœwonÃ¢Â€Â™t suffer greatly from closing a handful of stores.Ã¢Â€Â
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