Amazon Has Opened a Brick-and-Mortar Bookstore

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Portrait Of Male Bookshop Owner Outside StoreAt 9:30 a.m. on November 3, Seattleites could head over to the University Village and buy a book from Amazon. Now, this might not sound like something totally out of the ordinary, as Amazon’s marketing and business tactics have made it a book retail powerhouse, and for years, people have been able to buy books from Amazon just about anywhere. However, in this case readers could literally purchase their mysteries and biographies at Amazon — at the new Seattle brick-and-mortar Amazon store.

The 5,500-square-foot retail space is host to 5,000 books, far fewer than a traditional bookstore. The reason is that Amazon’s new retail location is displaying books with facing cover-out, rather than spine-out as you’d find in Barnes and Noble. The idea is that Amazon wants to show off authors, rather than titles.

The books are also priced the same as they are on Amazon’s website, which is incredibly low.

Now, this innovative approach is odd for more than one reason. Not only is it strange because no one else is doing it, but also because it doesn’t seem to make good business sense. It’s offering a thin selection of products at dirt cheap prices. How can a company like that make money?

Simple. Use the vast collection of data gleaned from millions of Amazon customers to select the best selling books. It won’t need to have a staggering breadth of titles if the 5,000 it offers are the ones people are buying.

“This is not the first time a powerhouse has tried to leverage its brand in a traditional retail space,” says John Diaz, Vice President of Business Development and Operations, On Top Visibility. “Historically, results have been mixed, so it remains to be seen how Amazon will perform. In an ironic twist, I would recommend that they prepare and have a strategy for “showrooming,” where consumers go into a store to shop for products to only go online later looking for a better deal.”

In 2011, Amazon is estimated to have sold about 22.6% of books in the United States. In other words, more than one in five books bought that year was purchased through the online retailer. On the other hand, Barnes and Noble sold only 17.3% of books. Lower prices, free shipping, an unfathomable selection, and the convenience of online shopping gave Amazon a staggering competitive edge.
Now, it’s turning that competitive edge into — well — another competitive edge.

Additionally, the store will offer Amazon’s Kindle e-readers and Fire tablets. It will not offer a pick-up option for online orders, though.

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