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Why Amazon's Rumored "Bookstores" Probably Won't Be What You Think

Amazon has something no other physical bookseller does—a sprawling, high-tech distribution network—so don't expect traditional bookstores.

[Photo: Flickr user Jörg Schreier]

On an earnings call yesterday, a shopping mall exec mentioned that Amazon has plans to open 300–400 bookstores. It was a surprising revelation, and probably not quite as straightforward as it sounds.

Following up on that report, which first appeared in the Wall Street Journal, the New York Times spoke to an anonymous Amazon source who confirmed the retailer’s brick-and-mortar ambitions but said they were much more "modest."

While Amazon has something no other physical bookseller does—a sprawling, high-tech distribution network—which could give it a major leg up in that game, there’s reason to believe it’ll be a while before an Amazon bookstore pops up in your neighborhood.

When rumors swirled in 2014 that the e-commerce giant might be launching a retail space in New York City during the holiday season, some wondered whether that presaged bigger things to come. Mostly, it didn’t. The 17-year lease the company signed on 470,000 square feet of midtown real estate is mainly offices. Amazon so far hasn’t welcomed shoppers into the remaining space, which seems more useful to the company as a way to continue experimenting with the same-day delivery, drop-off, and pickup services it’s been piloting for some time now.

"There’s no way to know" whether physical bookstores really are in the offing, digital publishing consultant Mike Shatzkin tells Fast Company, pointing out that "it is hard to know exactly what is meant by ‘300–400 stores’" in the first place. The advantages Amazon would have over competitors are obvious, and physical bookstores, he says, "would increase their clout and therefore their margins," which historically have been razor-thin.

But if Amazon does expand its physical retail footprint, don’t expect it to focus exclusively or even primarily on books.

It’s more likely the "bookstores" Amazon is said to be planning will be hybrids that cherry-pick from the physical experiments it’s launched already—part showroom/boutique, part warehouse, part pickup and shipping window, and, yes, part traditional bookstore—all operating as a physical node of an otherwise digital business.

The location Amazon opened in Seattle late last year offered some 6,000 titles, but it didn’t sell them the usual way: They were all "selected," according to Amazon Books VP Jennifer Cast, "based on Amazon.com customer ratings, pre-orders, sales, popularity on Goodreads, and our curators’ assessments." The locations it’s opened at some universities have been more ordering and pickup kiosks than full-blown campus bookstores.

In the past few years, Barnes & Noble did its damnedest to sell Nook devices to chain store customers—all while flooding its floor space with toys, games, and greeting cards. It's a physical bookseller with a failed digital business. Amazon has never been in that position and knows better than to put itself there. Instead, it may see physical locations as (among other things) more akin to Apple Stores, where it can showcase the hardware it sells online, with books being the sorts of things you might grab on your way out, like a new iPhone case.

"Do they see that the growth of indies in the wake of Borders's departure means there's an opportunity for a disruptor like them with an already fully built supply chain?" Shatzkin wonders. Maybe, but if so, that opportunity for Amazon would probably still be more of a means than an end. Ultimately, Amazon isn’t interested just in dominating bookselling. It’s already been there, done that.

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