In a shocking move, Amazon has opened a physical bookshop, the very institution it once threatened to make obsolete. So how can an internet giant squeeze into the retail space and hope to make it work?

Internet retail behemoth Amazon has opened its first brick-and-mortar store in Seattle, according to Gizmodo. The move has been viewed by many independent booksellers as a slap in the face, as Amazon’s rise to prominence heralded the slow and steady decline of a now struggling industry.

The Death of the Independent

Back in the late ‘90s, Amazon started making a name for itself at the expense of small, independent retailers who were unable to keep up with the company’s low prices and extensive web presence. Thousands of bookstores fell by the wayside, vanquished by the killer combination of e-commerce’s rising popularity and the proliferation of book selling megamarts like Barnes & Noble and Borders.

Forbes reports that today, there are 50% fewer independent bookstores than there were 20 years ago. It’s hard to compete as a standalone enterprise when the giants are getting their stock for half the price.

Unsurprisingly, the information collected by Amazon’s vast online distribution operation is exactly what’s needed to curate the perfect bookstore. By taking a big data approach, the retail giant can see which titles sell well in a given location and gain a better understanding of the demographics and demand of specific areas.

Is This a New Strategy for Amazon?

The interior of a warehouse.

Scottish Government/flickr

 

Because Amazon is using consumer data to gain a better understanding of regional demographics and demand, its brick-and-mortar locations won’t need to keep so many titles in storage. Stores will be able to dedicate a whole square foot to each book, allowing them to be positioned face out, somewhat mirroring the digital retail experience.

Amazon knows how helpful this visual approach to merchandising can be for sales, but it also understands the power of recommendations. As such, each book has a card with a review and a star rating, just like you’d see in the webstore. In an interview with the Seattle Times, Amazon VP Jennifer Cast referred to this unique approach as “data with heart.”

So far, Amazon’s brick-and-mortar efforts have been limited to pop-up shops centered around its line of proprietary devices or pick-up locations for online orders at universities, so how these new bookstores fit in current corporate strategies isn’t immediately clear. That said, Amazon is currently testing a plethora of new ideas, such as same-day delivery in select cities across America and their infamous Dash Buttons.

As Fortune points out, all of these initiatives fit into a broader internet-of-things-based strategy, which, in its purest form, has the singular goal of “getting as many products/services to as many people as possible by leveraging the data already held.” In this sense, the physical store is right in Amazon’s strategic wheelhouse.

How Will the Amazon Book Store Affect The Industry?

While disrupting the bookselling industry is certainly nothing new for Amazon, it’s hard to actually predict how the other retailers will deal with this new layer of competition. By creating an immersive retail experience that’s backed by solid, customer-driven data, Amazon has added yet another, meaningful dimension to the consumer journey — one that will probably be hard for traditional retailers to outmaneuver.

That said, there’s a certain joy inherent to “browsing” that may be lost in shops that are stocked based on data, not human care and interests. Many would argue that wandering through the winding rows of colorful, book-lined shelves and exploring the exotic and mysterious titles is sort of what it’s all about. Sometimes, people don’t know what they want until they see it. It will be interesting to see if Amazon’s “data with heart” is, in fact, human enough to catch on.
 
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