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What does Amazon’s move to open a new brick and mortar bookstore in Seattle signal?

It’s been said that everything old becomes new again in time. But has the time come for the online bookstore to go back to its roots, with actual physical locations?

Amazon opened a physical bookstore in Seattle in early November 2015.

The store is located in University Village, an upscale outdoor mall that is already home to thriving Apple and Microsoft stores. The company calls the location a physical extension of Amazon.com. Books are displayed face out and each contain an Amazon.com customer rating and review card. Books are selected based on popularity, sales and pre-orders. Prices are the same as online. The heart of the offering encourages what other stores fear – browsing then buying online. It’s retail showcasing but with a twist. The company doing the showcasing owns the well-established online business. And they’ve got a solid supply chain management system for delivery, whether digital or physical, through their growing network of warehouses, courier contracts and soon to be drones.

Many in business, and in particular the book business, were a bit mystified by Amazon’s move to open a bookstore in Seattle at the beginning of November. And they seemed quick to dismiss the move as having little impact on other competing bookstores. Link here for USA Today news coverage of their opening.

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But that opinion may be missing the point entirely. Selling books is not the path to riches. This only appears to be about books. They’re the test. Seattle is well known as a research area for Amazon. This is where they premiered Prime before rolling it out globally. I think the same could be true of this new approach to “showcasing”. Although Amazon started with books for their online sales model, the company now sells pretty much everything. Indeed their competitive advantage is in the online mass merchandising of items and the efficient delivery system that they control from tip to tail. I think this is about experimenting with the showroom concept and then applying it across all their product lines – far beyond books, and potentially with far reaching global applications.

The secret I believe lies in discovery and tactile touch. As humans we crave this process as part of the shopping experience. And as choices become more complex and online offerings grow exponentially, it becomes harder and harder to discover organically. We start to look to those who will curate the content for us and show us what is worthy of our time.

Curating physical content and assisting discovery is what this new move from Amazon is all about. And it could signal a very disruptive move across all industries as online shopping matures. Many stores are already frustrated with browsers who access product knowledge of staff, view the product in person, and then go online to purchase. In 2013 an Australian specialty food store started charging a $5 just browsing fee to enter the store. If customer bought product they were refunded the fee. I don’t think penalizing customers that way is progressive, but it certainly signals frustration at loosing sales to online after educating customers.

So might showrooming be the way of the future? Does Amazon’s move signal retail disruption?

 

 

 

Mary Charleson

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