The WSJ journal is quoting big mall operator as saying Amazon is planning 300-400 bookstores. Matthew Yglesias thinks it makes perfect sense:
http://www.vox.com/2016/2/2/10900082...ooks-explained
Quote:
In November, Amazon opened its first bookstore, and reports from the CEO of one of America's largest shopping mall operators Tuesday afternoon suggest that the company is prepared to open several hundred new ones across the country. This prompted many to ask why the company that destroyed the physical bookstore industry would possibly want to operate a physical bookstore.
Part of the answer is that, as the announcement of the original store location said, "At Amazon Books, you can also test drive Amazon’s devices," meaning Kindles, Echos, Fire TVs, and Fire Tablets "are available for you to explore, and Amazon device experts will be on hand to answer questions and to show the products in action." Apple has physical retail stores for its digital devices, as do (albeit less successfully) Microsoft, Sony, and Samsung. Since Amazon makes Amazon-branded devices, why shouldn't it have a store too?
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More interesting:
Quote:
On occasion, Amazon will turn a profit either to prove to Wall Street that it can, or else because (as with AWS recently) a particular venture simply proves more lucrative than expected.
But that AWS revenue was never going to sit around in the corporate treasury or be paid out as dividends. A surge in revenue needs to be met by a surge in new expenses. Recently prestige video content (Bezos says he wants to win an Oscar) and an effort to create a two-hour delivery service called Amazon Now have been soaking up the extra money. Brick-and-mortar retail is both another potential money sink and also a possible launching pad for Amazon Now services, which are obviously going to require some kind of logistical infrastructure.
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Bold mine.
The big hope B&M has been to leverage their storefronts to penetrate online sales. Amazon is (if we believe this story) going to flip it around and leverage online to penetrate B&M and save shipping costs.
Quote:
So why bookstores? For the same reason Amazon.com was originally an online bookstore. You've got to start somewhere, and the book industry is a relatively soft target. Since Amazon's already basically crushed the national bookstore chains, nobody can really stop the company from getting a foot in the door of this niche.
Ultimately, it might be a total dead end. But even if the effort to establish stores fails, it will be a potentially valuable learning experience. Amazon prides itself on a value it calls "customer obsession," but lacking a physical presence means the company ends up with a somewhat limited view of what its customers look like and how they behave. A retail presence can help change that.
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Bezos famously said "your margin is my opportunity". He never said that opportunity was online only. The story might possibly be true.
Much more at the source.