Amazon Commerce

Amazon's Portland Plans Prove B&M Bookstores Aren't For Books

Amazon's Third Bookstore

A handful of years ago, the very mention of a physical Amazon bookstore would be enough to get laughed out of a room. How quickly things change. Friday (June 17) saw Amazon announce the location of its third brick-and-mortar bookstore that will complement its growing network of locations in Seattle and San Diego.

So, where will Amazon be continuing its mission of retail domination in whatever form its shoppers choose? Los Angeles? Chicago? New York?

Portland, Oregon, it seems.

“We are excited to be bringing Amazon Books to [Portland's Washington Square Mall], and we are currently hiring store managers and associates,” an Amazon spokesperson said in the announcement. “Stay tuned for additional details down the road.”

The City of Roses is undoubtedly a fine place to do business, but it's something of an odd choice for a company like Amazon, whose reach is not talked about in metaphorical terms when words like "global" and "borderless" are thrown around. However, instead of plopping down a tourist attraction of a bookstore in Times Square, it'll be a city of just over 600,000 people (less than half of San Diego and 50,000 short of Seattle) that's graced with Amazon's third B&M bookstore.

If you're not asking why by now, you should be. Fortunately, Amazon's decision to go with Portland makes the answer clearer than ever.

The news of the third B&M bookstore comes just about a month after Amazon CEO Jeff Bezos shared some of his cryptic thoughts on his plans for the bookstores, namely how many of the rumored hundreds, or even thousands, of locations Amazon might open by the end of 2016. Instead of corroborating the scuttlebutt, however, Bezos seemed to undercut the traditional all-consuming metric of sales, sales, sales.

“We’re definitely going to open additional stores. How many? We don’t know yet,” Bezos said at Amazon's annual shareholder meeting, via The Wall Street Journal. “In these early days, it’s all about learning, rather than trying to earn a lot of revenue.”

Nervous Amazon investors should take care to re-read that last line. The eCommerce giant's physical bookstores aren't supposed to make truckloads of money. Though one could argue that Amazon's been doing the same thing with its online sales for decades now, its decision to plop its third bookstore in a tier-3 city of just over a half a million residents is a hard sell on the profit-based front.

But how about on the data collection one?

It's been an open secret for months that Amazon is less interested in selling books in its bookstores than it is in learning about how consumers behave in B&M stores in the first place. Through that lens, it starts to become clear why Amazon would place two physical bookstores in such close proximity. Seattle, its headquarters, provides a level of intimate control over in-store experimentations, unlike anything possible, and Portland, just down the road, offers the same kind of access, while also tapping into a population that earns about $10,000 less in median household income than its Emerald City counterparts.

Is that enough of a difference to manifest itself in the way shoppers in Portland and Seattle peruse books on Amazon's B&M shelves? It's certainly worth the attempt, according to the company's plans, and if it succeeds in converting a few Portland stalwarts to the Amazon cause, it's hard to see it as a failure, even if it fails to sell a single book.

“Everyone was shocked and amazed at Amazon’s bookstore, but the bookstore is a Trojan horse to get devices into consumers’ hands,” retail analyst Doug Stephens told Retail Dive. “Everything Amazon does is aimed at that — getting their consumer into their ecosystem.”

And that ecosystem keeps gaining entry points online and, bookstore by bookstore, in the B&M world.

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