I'm very curious what Amazon is trying to do here. Can the business plan pencil out by selling enough additional goods to pay the store's operating expenses? Is the real goal to expose more people to the Kindle who wouldn't otherwise see one, i.e. it's a Trojan?
In 2013, Amazon had 65% market share of online book sales [1]. It wouldn't surprise me if this was 20% higher now.
When customers walk into a Barnes and Noble (or any bookstore) and browse books but don't buy (for example, because they found a cheaper price online), they are most likely to end up on Amazon to complete the purchase. B&N did the work but Amazon got the money.
Amazon doesn't have that problem. They don't need to sell books in the store to "pay the store's operating expense" - they just need people to come in and browse.
Currently, Amazon doesn't compete for a high percentage of books (50%) moved through physical stores [2]. They are in the enviable position of being able to create stores that don't leak sales to competitors. This is the final nail in B&N's coffin.
This is an interesting thesis... which is that brick and mortar can work if you also own the online alternative.
I never bought books and B&N because I knew I could get the book cheaper at Amazon. The same with toys when I used to shop at ToysRUs. But those are both goods that I'd actually like to buy on the spot. If I know that the price in the store is the same as online, I'd probably do a lot of in store purchases.
And since I'm a Prime customer, they save 2-day shipping cost to me (I'll continue to be a Prime customer).
I used to hold this viewpoint until I watched a video (I can't seem to find it now) that made a pretty good point. The point was something along the following: "I like book stores. I like going in and flipping through the books. Sure, I could buy the book on Amazon for $4 less, but if I keep doing that eventually book stores won't be around. And I like book stores."
Ever since then, I usually try to buy the book in B&N or wherever, provided that's where I am at the time.
(Something like a campus book store and textbooks, however, is an entirely different case...)
For such concerned customers, Amazon Book store seems to be the solution. So still you can flip the pages and buy online but Book store won't go anywhere.
Seems like retailers either accept this, or fail to.
For example, Best Buy, they knew people were coming in to sample goods and then buying it online. Their solution was simply to agree to price match Amazon, and that appears to have been quite successful, I know I have purchased things at physical BB instead of Amazon due to the policy.
They still make margins on their in-house warranties, and any goods sold not priced matched. I don't legitimately know if they lose money on some goods price matched on Amazon, or if they can pass some of it on to the manufacturer.
Just this week we were in Barnes and Noble, and we skipped buying things because they were cheaper on Amazon. It is sad but true.
PS - We did buy stuff on sale, and get coffee/cake at their little coffee shop, so we aren't complete monsters.
> they knew people were coming in to sample goods and then buying it online.
And even when people go into their store with the intent of buying, they don't, because of BB's poor customer service. My sister just did this - she wanted to buy an iPad, but couldn't find anyone to sell one to her (from the security-locked cabinet). So she did a search on her phone while standing in the store, and bought it from Walmart.com
Additionally, the decline of brick and mortar book stores may have hurt Amazon's book sales. Customers no longer have as many showrooms to browse for books. See also: Tesla showrooms which cannot sell you the car (due to dealership rules).
I hope it isn't. I like B & N book stores so much, I would consider paying a monthly fee just to browse, and hang out.
Every time I go there, I wonder how they keep the lights on.
I leave and look back thinking, "Will this be my last visit?"
I dont know what they can do in order to stay in business. I don't buy books there. I have a weird taste in books, and they just aren't at B & N. I mainly buy old books at used book stores. I do buy magazines there though, and food and coffee.
If by some miracle, I was made CEO. I would try a few things.
I would get rid of Starbucks. All the food and coffee would be in-house. I would basically copy what Starbucks does, but add more food items. I would also expand the eating area. I think Starbucks does a great job, but I'd rather all my money going to B & N. It probally wouldn't be feasible--I imagine Starbucks has some great leases, and agreements?
I would add more seating to the store. No sofas, but more wood seats, and benches.
I would have all security in plain clothes.
They would all be open until 11 p.m., except Sunday.
Their employees are great. I would leave them alone.
I would add a used, and rare book room to each store.
I know I'm rambling, about a business, I know nothing about. I just don't want them to close.
The Barnes and Noble cafes aren't actually Starbucks; they serve Starbucks products (probably for historical reasons) but they have products Starbucks doesn't have, and they don't accept Starbucks gift cards.
Their use of floor space to show all the books cover-facing-out seems to suggest that they're looking to move dead-tree books too...
Barnes & Noble definitely became a showroom for the Nook, but it was also selling books. This might imply that Amazon is re-deploying the same strategy but without the dead-weight of under-performing brick-and-mortar stores. (i.e. Amazon gets to use it's data to only put stores in places where it knows traffic, volume, and customer profiles will perform well.) I expect Barnes & Noble knew much less about its customers when it set up its network of stores...
> I expect Barnes & Noble knew much less about its customers when it set up its network of stores...
There may have been less available data altogether, but what data was available indicated people shopped in and near malls, hence a lot of B&N in malls. But with malls seemingly slipping away, B&N will have to relocate or adjust more radically.
Where I live book shops have tended to become more like gift shops. They sell something that is an expensive luxury that you buy because it is a nice thing. Amazon have a huge advantage in this by giving the buyer an assurance that the present will be well received. You can buy a book for a 5 year old relative without knowing what a typical 5 year old actually likes.
This could easily extend to none-book purchases (probably the end goal). There are lots of products that are a little obscure that you don't find in physical shop but have high ratings.
> Amazon have a huge advantage in this by giving the buyer an assurance that the present will be well received. You can buy a book for a 5 year old relative without knowing what a typical 5 year old actually likes.
Individual variation is significant enough that I don't think that Amazon's data-based understanding of (say) typical 5-year-olds does much to provide assurance that a gift is right for a particular 5-year-old.
If the particular recipient actually is an active Amazon purchaser -- especially with a strong rating history -- you might get some assurance, but that's a different thing (and more applicable to online than in-store sales, probably, anyway.)
The tech is pretty central in the store, and there are lots of people talking about prime, showing off selection on TV, etc. Really it's actually fulfilling the duty of a book store in U Village though, the Barnes & Noble there died a few years back and it's a huuuge shopping center. I don't think Amazon is trying to make a lot of money off it, it's kind of a lark but if it floats, they can open a few more to have brand presence next to Apple and Microsoft.
Amazon.com started off with books, but now they sell everything. I can only imagine what an innocent-looking bookstore from Amazon will eventually become in a decade.
This might be more a customer acquisition strategy rather than trying to run the store profitably. As another comment pointed out, Amazon must have data regarding literary interests of people around every geographic location. This can be put to use here.
The same way Amazon started by offering just books on its online store and then expanding, they are probably now doing the reverse with a physical book store..
They could eventually use these as order pick-up points for customers or launching points for drone deliveries. The biggest pain when using Amazon is having to worry about the package getting stolen or going and tracing it down at the shipping office. I'd rather just drop by the Amazon store on my way home from work get the package and be on my way.
If they wanted to do this, they wouldn't start it in a location where parking is a pain (which it kinda is in UVillage) and where retail space is really expensive. Better to go somewhere with cheaper space and a more central location. So that's definitely not the plan.
I'm not disagreeing that they need an alternative to delivery, and they know it. That's why they've been trying stuff like Amazon Lockers (in 7-11s and such) and why they're working on the drone delivery which could adapt to when you're home.
While it certainly conjures up negative associations for me - I would actually be in favor of a process with similarities to a drive-thru for pick up of online orders.
It may be nice to go inside and browse, but the experience in entropy that is now making even a minor purchase at Apple stores has me in avoidance of them.
I'm sure they thought about it, then realized that shipping from the fulfillment center to the bookstore wouldn't be all that cheaper than just doing home delivery.
They'd have to either use drones, or do constant runs from fulfillment centers to bookstores to make it significantly faster than the same-day / second-day delivery you already get with prime.
Interesting what they might be able to do here with their geo data... University Village is a high-end shopping center with a lot of high-income traffic. The way they're stocking the shelves - covers facing out - combined with the convenience of strolling down from the big Starbucks to the store to grab the latest just might work for this clientele.
Not to mention the chance to get more Kindles into the hands of folks with low price sensitivity...
Maybe the library but the book store...well not if you are then taking home only what you purchase from Amazon instead of the place you just comfortably browsed inventory.
I find it hard to understand the logic of using a place of business in order to take advantage and not purchase from them. People justify it in many ways but none of those justifications stands up to examination.
Right, I remember reading about bookstores that were kicking people out who were scanning ISBN barcodes to buy the same book on Amazon for cheaper (to their cost. Shipping costs adds up but not on the end-user)
With the expectation that if you like their inventory, you'll pay for the convenience and service in store. If you receive a benefit from that convenience and service, there's no way to contribute to the existence of the store outside of purchasing their product (I suppose you could donate straight to the owner, but that's messy).
It's a neat idea, and a good way to put a public face on their business.
The major reason I'd still prefer to shop online is the reviews. I doubt that those are printed alongside the physical copies. Sure, I could read the reviews on my phone - but why not then finish my one-click "Buy" instead of walking all the way to a store just to look at my phone screen?
I hope that their employees are treated better than those in the warehouses, too. (from what I've heard, it's pretty bad behind the scenes).
According to the article, even though you can't see all the reviews, you can see at least one review or a rating: "Below each book on the shelf is a card with either a review or a rating from the site."
"A rating". Why not give high-margin items get a cherrypicked high rating, and low-margin items a cherrypicked three/four star rating (you can't just say everything is five stars, of course).
Possibly, but given (1) everything in the store is highly rated and (2) they're as much as asking customers to "showroom" and check for more information on Amazon.com, it seems like that would backfire pretty quickly.
Interestingly a lot of data they say they're using is available to any bookstore. I wonder if there are small mom-and-pop chains that use Amazon ratings and sales ranks as cues for their buyer.
A tie-in to an e-reader that still makes the bookstore money is a killer feature for me as a reader. Indies still haven't gotten that totally sorted yet, and it keeps me buying more paper books than I'd like, and also buying less books at indie's than I'd like at the same time.
A friend of mine gave me guff about my kindle -- his parents had a book store, but couldnt keep it open. I started to think about how an indie book store could work in an ereader world; my ideas:
You'd need an ereader with a small nfc reader or barcode scanner. Customers browsing the paper books in store could elect to buy the same book for the ereader in store if they wanted by just scanning the book with their ereader, then taking it up to the front and pressing a 'show cart' feature that would give a barcode for the cashier to scan, bringing up the cart total payable. Upon that payment finishing, the ereader would get a ping from a server and instruct it to download the ebooks just purchased. The store would get a majority of the cut of the vendor side of the sale (if amazon takes 30%, a bookstore would get 25% and the service provider/ebook mfg would get 5$).
This would allow people to support indie stores, continue to buy both ebooks and regular books, and do them both at the same time.
It's not a complete or foolproof plan, just an idea I had that could help batter down the hatches.
The more you think about it, both the indie book store owner and Amazon would have no incentive to participate. The indie book owner wouldn't want to give away 20% of gross sales to survive, because there isn't much there to begin with.
If Amazon books takes off, maybe they franchise it out and allow personal branding of some kind.
Today, a bookstore. Tomorrow, Amazon's the new Walmart/Tesco and everything's priced the same as Amazon.com.
Either that, or this is a glitch in the Matrix and a digital store accidentally became real.
Seriously though, the digital-to-physical world touches like a cookbook row of the most wished-for cookbooks or Amazon's top preorders on a real shelf is fascinating. Almost surprising we don't see more things like that already in other stores. It's data eating the world.
The price isn't displayed - you see the standard/printed price on the book itself (i.e. $25 in usa) and then take it to one of several little stations that tells you the current price on Amazon ($16.94 or whatever, you save X amount). You can also scan barcodes on each little review placard with the app and it'll pull up the price.
Not ideal, I'll allow, but since the prices fluctuate there's not an easy way to do it without looooots of digital signage.
Digital signage would also produce some level of shopping anxiety as it could lead to situations where customers saw prices of books change automatically while on the shelves.
I'm there right now and loving it!!! It's fun scanning the books and seeing the price be so much cheaper than the suggested retail. The selection is massively more interesting and less stale than other bookstores. Also very seattle oriented.
This seems so backwards. Amazon lead on cheap prices. But this retail store only displays book/listed price. Which are higher. The only way to get the real price is to manually scan each one. Why? What am I missing?
Perhaps for the mass-market titles but once you start pushing into the long-tail then RRP becomes much more common.
Couple of random examples from Amazon UK this morning:
You Save: £0.72 (2%)
You Save: £0.55 (2%)
I doubt many people will see savings like that as incentives. Rather, Amazon's advantage is that they actually offer such books for sale without the hassles of persuading a clerk to order a single copy for you, assuming their supplier carries it.
I suspect ebooks will replace the mass market pulp sort of books while higher quality first-run paperback and hardback books will persist. With a much smaller resale market and books worth owning for more reasons than just one or two read-throughs the whole market looks different.
