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Old 02-04-2012, 09:40 AM   #1
fjtorres
Grand Sorcerer
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Amazon on the brain: Kindle B&M Retail Stores?

By now its clear that a lot of people in the publishing business have a twitchy, knee-jerk fight-or-flight reaction at the sound of the name: AMAZON.

It turns out they're not alone:
http://www.launch.is/blog/rumor-amaz...g-channel.html

http://www.launch.is/blog/amazon-has...ding-them.html

The articles are two months old but quite amusing in a 50's "The Reds are coming!" way. Or maybe, "The Blob!"

I'm wondering if the folks at Amazon get off on propagating these kinds of stories to build up their mystique and keep opponents off balance.

After all, with all the fuss over their not charging local taxes (because of lack of Nexus) the idea that forcing them to charge taxes invites and faclitates a *physical* invasion by Amazon has to be at least mildly disquieting to the Anti-Amazon crew. Can't be too comforting to the B&N and BAM execs doing their oh-so-principled stands againts Amazon-published books to think of Amazon responding by setting up their own chain of B&M shops across the street.

Paranoia is a survival trait, though.
Might there be a bit of fire under all the smoke of FUD?

Well, I'm of the opinion that the future of B&M pbook retailing lies in going back to the future, to the old 70's and 80's B. Dalton model of bookstores (3000-5000 square feet) built around periodicals, "bestsellers", and genre fiction. But with 21st century in-store ordering terminals for the rest of the catalog. Add in regional depots for next-day in-store pickup of terminal-based and online orders and you have a very lean but effective distribution channel better suited to the times than the regional superstores of recent decades.

Stick them in enclosed malls everywhere--strip malls in the more affluent neighborhoods--like GAMESTOP, RADIO SHACK, and PAYLESS. Maybe even *franchise* the things. (Richard Adin got me thinking in that direction, BTW. It has its merits: less corporate investment required and it defuses the whole "Amazon is coming to kill local businesses" hysteria.).

For B&N and even BAM, getting to that lean retailing model--much better suited to fighting off dept stores and supermarkets by leveraging the online sales and distribution supply chain--will entail much disruption and pain.

For Amazon, alas, not...so...much...

So, while I think all the angst over Amazon pulling a SEARS and going from (online) catalog sales to B&M ubiquity is unlikely, I do think there is a crying need for a new B&M retail model for the internet age.
*Somebody* is going to do this. There's money to be made! (If nothing else, from the folks who proudly support local businesses.) People to be hired, too. (Hmm, there might be a Solyndra-type government loan program to tap, too.)

And, admittedly, Amazon does have all the pre-requisites:
- logistics chain? Check.
- brand visibility? Check.
- product catalog? Check.

Do they have the need to go all the way to B&M to *grow* their business? Maybe not. There are no signs that online retailing is hitting the wall just yet.
But...

For quite awhile now Amazon has been focusing on adding customer convenience and service to their price and catalog-size retailing toolkit. Kindle. Prime. Same day delivery in select metro areas. Even the delivery lockers they've been "experimenting" with...
http://www.amazon.com/gp/help/custom...deId=200689010

Those lockers are... curious...
They're definitely a local presence. A Nexus in tax police lore.
It hits at things to come but what is unclear. Ubiquitous order terminals in Mall Kindle kiosks? A merger with UPS?

For now, they've been piggybacking on partner businesses. If they expand them further, they would be naturals to be included in a chain of B&M sites. They could sit unobtrusively in the back next to the order terminal kiosks.

All the angst over Amazon over their tiny Amazon Publishing venture is, frankly, overblown. What's their catalog? 50 titles? They could grow it ten-fold and it would still be noise in an industry doing hundreds of thousands of books a year, in the US alone. And they are going to kill six giant multinationals? Yeah, right.

The focus on Amazon taking over the upstream side of the business is ludicrous. Pure FUD-mongering from a crowd that has been complacently grazing for decades, living off their now-gone gatekeeping power, and now faces the oh-so-dreadful prospect of having to actually earn their keep.

But Amazon increasing their reach downstream?
Well, now, isn't that what Kindles are all about? Each Kindle is a Storefront, after all. (The FIRE most of all.) And you can't get much more local than inside the house.

Still, I have to say that for all the merit in the lean bookstore model--and I think *somebody* is going to do it and soon--I don't think Amazon is headed that way yet. Online is still expanding and rapidly and that business is way cheaper to expand through other moves. A TV Set-Top Box comes to mind as a likely posibility. Even a cellphone line. (A dedicated Amazon store button; one click to connect, one click to buy.)

I won't dismiss the idea of Amazon stores... or better yet: Kindle Stores.
Not down the road.
But for now there isn't much need just yet.

But I gotta say, the rumor does sound like Bezos has found a nice way to rattle the cages of his enemies. Keep'em off balance, looking over the shoulder...
Give *them* a taste of FUD.

Last edited by fjtorres; 02-04-2012 at 12:28 PM. Reason: ytpo
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