Will Amazon.com Stores Be Good for the Book Industry?

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Is this what an Amazon.com store shelf would look like?

By Jeremy Greenfield, Editorial Director, Digital Book World, @JDGsaid

E-tail giant and major bookseller Amazon may be headed to a neighborhood near you if a rumor published online proves true. Question is: Would it be good or bad for the book publishing industry?

In a blog post titled “Rumor: Amazon Retail Stores Coming & Predatory Pricing Channel Destruction,” Jason Calacanis wrote, “Just heard an interesting piece of gossip from a very credible source: Amazon is going to open retail stores and will start making its own branded merchandise.”

It’s the one thing that Amazon hasn’t tried in order to serve its customers better, points out David Streitfeld in a blog post at the New York Times. Amazon has relentlessly cut down on the time that most people have to wait between ordering something and receiving it. But, “Until we achieve the teleportation of objects, there is only one way to immediately get physical goods. It is called a store,” Streitfeld wrote.

Streitfeld went on to compare a possible Amazon.com bricks-and-mortar play to Apple opening its own stores in the early 2000s. A hi-tech company opening old-fashioned stores? It will never work, analysts crowed. Those same analysts later ate crow as the move has been one of the most successful in the company’s storied history.

According to reporting by FINS.com (a website for which the author was an editor), in 2010, Apple stores accounted for $10 billion of the company’s $65 billion in revenue. Its stores averaged $4,000 of annual sales per square foot, five times that of Best Buy. The Apple flagship store generated about $35,000 per square foot that year, double that of nearby Tiffany’s, the luxury jeweler.

Things are different with Amazon, however. The Apple store stocks and sells a limited kind of item: Apple electronics, software and accessories. The Amazon store would conceivably be Costco plus Whole Foods plus Barnes & Noble, but bigger.

Calacanis envisions many possible scenarios, including a show-room for goods (Consumer Reports meets the Apple Store on crack!”), an Amazon-branded Wal-Mart, a used book and DVD store or a library.

As publishers figure out how to sell and market their books in a world with fewer bookstores, a new nationwide books retailer could be welcome news. However, publishers, many of whom are wary of Amazon’s growing influence in the books business, may not wish Amazon to be the company to deliver that dream.

For Amazon’s part, a significant bricks-and-mortar presence could do much to give it leverage in the company’s most recent conflict with bookselling-rival Barnes & Noble, which said this week that it would not stock physical copies of any book that was exclusively sold electronically through Amazon. For its own part, Barnes & Noble executives are likely not excited about the possibility of Amazon taking the battle between the two companies to the street.

To be sure, it’s unlikely that this rumor will come to pass, reports Streitfeld, as Amazon analysts think that investing in physical storefronts would be a bad way for Amazon to derive good return on investment. Still, the same was said of Apple.

Write to Jeremy Greenfield

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