Last month, Amazon opened its fourth brick-and-mortar bookstore called Amazon Books in Dedham, Massachusetts’ Legacy Place shopping center. The first three locations are on the West Coast in California, Washington and Oregon. There are plans to open at least four more locations on the East Coast, but rumor has it that the plan is to open hundreds of locations nationwide.
Amazon opening brick-and-mortar locations is actually rather ironic, given that it was the rise of the e-commerce giant that gave way to physical bookstores like Borders going out of business in 2011. The switch to online retail is what kept Barnes & Nobles afloat, along with the advent of their e-reader, the Nook. So with the trend of reading shifting to digital, why would Amazon make a decision that would seemingly go against the curve and open retail locations?
How is Amazon Books different from Barnes & Nobles?
According to USA Today, Amazon is using its store fronts for a few different purposes. Primarily, the point of Amazon Books locations is to be a showroom for Amazon products such as Echo, Kindle, the Fire tablet and Fire TV, which are all prominently on display in the stores. The target audience is those who already have Amazon Prime, as they receive a larger discount on the books than non-Prime members would receive, which is reportedly 10% to 30% off the cover price. Clearly, the showroom is also a catalyst for signing more people up for Prime memberships and continuing the hype that Prime is well-worth the cost of membership not just for the free expedited shipping it offers but also the discounts on books offered in storefronts. An article in Computer World points out, too, that by signing people up for Echo, it is like a “gateway drug,” opening up a consumer to a future of Amazon purchases. The same goes for selling a Kindle; once you sell it you open up a line for consumers to continuously purchase e-books from Amazon. Having potentially hundreds of brick-and-mortar locations will also reportedly help Amazon to sign with larger authors as well as increase speed of delivery, which is already a major strength of their business. In a sense, Amazon is going back to its roots with the storefront bookstores, as it first started out as a book e-tailer in 1995 before getting into other consumer goods.
Will other companies follow suit with moving “backwards” from the digital age as Amazon did with its storefront?
A rather specific similarity that I recently saw was online wedding website, The Knot, coming out with a print publication. This is huge, given that the whole platform that companies such as WeddingWire and The Knot run off of is that word-of-mouth has moved to online reviews, and that the future of business is digital. However, The Knot publication is one that seems to whet the appetite for more wedding content that is solely available online. It is an appetizer, if you will, for what you can get on the actual wedding website. Wedding magazines are still popular amongst consumers as they are fun to thumb through and users enjoy the tactile interaction with articles, however every wedding magazine component has moved to additionally having an online presence. It is interesting to see companies such as Amazon and The Knot (although they are of very different sized customer bases) start out online and then move to physical presences as a storefront or print publication, when both seem to be dying industries. Interestingly enough, Amazon Books has set up their store so that their 5,000+ books on display all have a card tucked inside of them, showing the reviews of the books and how they were reviewed on Amazon’s 5-star rating system. Whether it is the wedding industry or publishing industry, the importance of reviews and relying on visuals of how something stacked up for a previous user or customer is now the forefront of technology; regardless of whether or not business is conducted online or via retail location.
What does the future hold for printed books?
The future for print books is not as clear as it is for print newspaper. Print newspaper is dying at a rapid growth, but according to BBC, while e-reading is certainly on the rise, it is not taking out the printed book industry as fast as newspapers are dying out. They predict that it will still be another 50-100 years before print is gone. According to a Pew study, three in 10 Americans had read an e-book in 2013, and as of 2015, over half of American adults reported owning some form of e-reading tablet. From 2008 to 2010, there was a 1,260% increase in sales of e-books, after the Amazon Kindle was launched in 2007 (New York Times). In the past two years, however, the Association of American Publishers has cited that e-books constitute only 20% of book sales; thus plateauing in the past couple years. Clearly, Amazon is at the forefront of innovation and would not open brick-and-mortar stores if they did not see them as a way to profit – especially if statistically 80% of book sales are still hardcopies. But are they leveraging the stores for the purpose of showcasing their e-readers or to increase print sales? They have not revealed their thought process, however whatever they are doing is clearly working and their new brick-and-mortar bookstores are creating quite the buzz.