Amazon’s Brick-And-Mortar Plans Aren’t Just About Books

It's been a odd week for Amazon news, and Amazon didn't even make any of it itself.

Reports surfaced that the CEO of a large shopping company said Amazon had plans to open 300–400 more physical bookstore locations. And, as one may guess, this sent the major media outlets and retailers into a frenzy.

“You’ve got Amazon opening brick-and-mortar bookstores, and their goal is to open, as I understand, 300 to 400,” Sandeep Mathrani, CEO of mall operator General Growth Properties, said during his company's earnings call.

However, that CEO may have been a little too literal with his words that turned out to be more of a generalization — at least based on his response to all the reports.

His statement got so much attention that Mathrani had to release a formal retraction of his comments, saying his remarks were "not intended to represent Amazon's plans." And his response via his company pretty much ended there and didn't include any follow-up remarks or clarification as to how or why he had made such a specific comment.

And now, the rumor mill is continuing. But perhaps with a little more credibility. Re/code's Jason Del Rey reported this week about Amazon's plans to expand further into physical retail — but with more than just books.

Speaking to three sources said to be close to the matter, Re/code's report noted that Amazon's retail store plans are being headed up by Steve Kessel. He is the exec behind the Kindle eReader and is reportedly "very tight with CEO Jeff Bezos," according to Del Rey's report.

And the details behind these retail ambitions have been known within the upper ranks of Amazon, reportedly, for some time. But the bookstore that launched in Seattle last fall took precedence.

Amazon’s entrance into the (physical) bookstore world was reported back in November when Amazon announced it would open its first brick-and-mortar shop in Seattle’s University Village. The style of Amazon Books is familiar to anyone who has ever perused the stacks of a mall bookstore — wood shelves laden with bestsellers and customer favorites.

Amazon, which for years has been the terror stalking the dreams of physical booksellers, had, before then, leveraged its ability to undercut its rivals on price by sidestepping the overhead costs associated with physical retail. Now, armed with a massive pile of consumer data on book preferences gathered nationwide for the last two decades, Amazon is turning to physical in the hopes of leveraging all that information into doing it better.

Particularly, Amazon might be able to avoid the typical trap that catches booksellers: the unsold title that languishes unsold, taking up valuable shelf space. With better insight into customer habits, Amazon could theoretically do a better job of picking titles that move and avoid sluggish inventory.

What we know is that Amazon will likely open more bookstores. Maybe not 300–400 more, but who really knows outside of Bezos' empire? And outside of those books, sources who claim to be close to the plans indicate that there will be other retail stores besides those bookstores to power Amazon's brick-and-mortar side.



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