In the various reviews I've seen for this store, no one seems to have raised the question of, how would a store like this be profitable? It's selling books at the same prices as Amazon online, but with the added overhead of being in a very high-rent space in an upscale shopping center. There seem to be lots of employees for a book store. At the discounts that Amazon offers, their margin on books is thinner than most bookstores. Sales would need to be very high to make this pencil out, from what I can see.
This might be a play like the old Crown Books stores which sold only best sellers at a big discount with the idea of making it up on volume. But Crown did not last long. Amazon does have good data about what people buy, so perhaps they could maximize revenue per square foot by packing popular sellers in. On the other hand, one departure of this store from typical bookstores is that books are all facing out on the shelves, meaning fewer titles and probably less revenue per square foot.
I'm wondering how this approach to bookstores could pay off for Amazon, except by putting competitive pressure on any other bookstores in the area. But Barnes and Noble closed the store it had in this shopping center quite some time ago. Is it advertising, an attempt to upscale Amazon's brand? Amazon has the number one favorable brand among consumers from what I've read, and it's certainly where most people go these days for books -- last report I saw said over 80% of book buyers use Amazon. So what the business purpose of this store is, unclear to me. But it's Amazon, and surely they're just a few steps ahead of what I can see.
Those physical Microsoft stores are often practically vacant.
But what would the marketing budget for a really well placed billboard be per month? What if you could walk into the billboard? Host launch parties starring famous bands, getting you into more news stories. Fans can make a pilgrimage to something tangible.
Apple stores are clearly profitable, but I wonder if "close to break even" isn't a good enough goal for brand awareness stores like these.
Interesting. The Microsoft store here in Seattle (same shopping mall as the Amazon Store) generally has more employees than customers when I walk by in late evening. In contrast, the Apple store ~100m away, facing the Microsoft store, is reliably busy.
Customers are being trained to repeatedly scan barcodes to check the price on Amazon. Something that, rather conveniently, they can then do in every other shop they visit.
Like many other Amazon products, it's likely to get people into the Amazon ecosystem. You need to install the Amazon app to read prices and they can upsell their Fire devices in-store. Considering how they went for a high-end Barnes and Noble/Apple Store mix vibe, their primary goal is likely not to sell books but to get a foothold into physical retail like Apple.
This might be a play like the old Crown Books stores which sold only best sellers at a big discount with the idea of making it up on volume. But Crown did not last long. Amazon does have good data about what people buy, so perhaps they could maximize revenue per square foot by packing popular sellers in. On the other hand, one departure of this store from typical bookstores is that books are all facing out on the shelves, meaning fewer titles and probably less revenue per square foot.
I'm wondering how this approach to bookstores could pay off for Amazon, except by putting competitive pressure on any other bookstores in the area. But Barnes and Noble closed the store it had in this shopping center quite some time ago. Is it advertising, an attempt to upscale Amazon's brand? Amazon has the number one favorable brand among consumers from what I've read, and it's certainly where most people go these days for books -- last report I saw said over 80% of book buyers use Amazon. So what the business purpose of this store is, unclear to me. But it's Amazon, and surely they're just a few steps ahead of what I can see.