Amazon has just opened its first physical bookshop, aptly named Amazon Books.
Based at the Seattle University Village the shop will stock the most popular books from Amazon.com and prices will match those on the website.
Ars Technica wrote a fairly comprehensive piece on how Amazon Books works after visiting the shop, but I wanted to explore why such a quintessentially digital brand – one that is arguably responsible, at least in part, for the closure of many physical bookshops – is getting involved in a supposedly endangered channel.
The answers are fairly straightforward.
Amazon has the kind of data other booksellers can only dream of
What Amazon lacks in physical retail experience it makes up for in some extremely powerful sets of data.
Amazon has access to everything from customer ratings and reviews to pre-order and sales stats, and it will even be taking into account the popularity of a book on reader recommendation site Goodreads.
As a physical retailer, to have this combination of information readily available is massive.
Of course other booksellers can use data to decide what they’re going to stock, and they absolutely do. But I highly doubt their data is anywhere near as plentiful or useful as Amazon’s.
Not to mention the fact that Amazon’s data, given that it all comes from digital sales, is much more relevant in real time.
This means Amazon can be much more agile in terms of deciding what to stock in its physical shop.
It can use online data to inform the offline experience
Amazon Books vice-president Jennifer Cast describes the shop as “a physical extension of Amazon.com” that “integrates the benefits of offline and online shopping.”
This pretty much sums up one of the biggest potential benefits for Amazon: not only can it ensure it only stocks the books people are most likely to buy, it can also create an offline customer experience that is relatively consistent with the online one.
In an increasingly multichannel marketing environment where a consistent customer experience is the goal, this is quite a powerful prospect.
Take the image below as an example. By displaying Amazon.com reviews on the shelves of its physical store, Amazon has recreated a key part of the online experience.
Similarly, Amazon has used the star rating from its website – something that anyone who has used the site will recognise – to bring a sense of familiarity to the physical stores.
It can showcase products other than books
In addition to browsing books, customers will be able to try out various Amazon devices, such as the Kindle and Fire TV.
Tunes from Amazon’s music streaming platform, Prime Music, will play through speakers.
This is a big opportunity for Amazon to showcase its products in a physical environment to people who are likely to be fans of the brand already.
Again, this is something other booksellers simply can’t compete with: the ability to stock all its own products and create a completely joined-up physical brand experience.
The reaction from rivals is telling
James Daunt, managing director of rival bookseller Waterstones, said he hopes the project “falls flat on its face.”
I don’t know about you, but to me those sound like the words of a worried brand.
And Daunt is right to be concerned. Whatever your views on the morality of Amazon’s business model, it has proved itself to be nigh on unstoppable in almost every venture it takes on (notwithstanding the Fire Phone, of course).
Physical retailers are suffering, but many of them are suffering because of outdated business models or because they’re too slow to adapt to the changing market.
I’m not just trying to big up Amazon Books here because the idea isn’t perfect by any means, but one thing is for certain: it is something new in the bookselling world and it will be very interesting to see how it develops and whether it succeeds.
What do you think? Is this a one-off PR stunt, or can Amazon really expand on this and translate its online success into offline retail?
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