Amazon’s Retail Plan Isn’t About Books

Looks like a Barnes & Noble

What’s up with Amazon opening a store in Manhattan, with hundreds more coming to towns that used to have book stores? 

It has very little to do with books.

It’s funny that Amazon’s “unique” approach to book retailing involves listing bestsellers, displaying gizmos for reading, and displaying book faces instead of spines. There’s a Barnes & Noble in Union Square that does all of those things, even if it does so differently.

Amazon’s bookstore VP said “the purpose of this store is discovery,” which isn’t terribly compelling since the company’s online discovery tools are immense and wildly useful. Discovering the limited stock Amazon chose to put into a geophysical store can’t hold an e-book to what it displays and connects on its website.

I think to understand the bookstore strategy, we need to see a broader access and delivery strategy that includes Amazon’s forays into grocery and purported contemplation of electronics stores, along with its fulfillment centers, same-day delivery, and drone experiments.

Imagine a two-columned chart: The left column is entitled “Purchase Decision,” and it’s filled with different types of transactions, from “Considered” and “repeat,” to “necessity” and “impulse.” The right column is called “Channel,” and it’s filled with the ways Amazon enables those purchase decisions, from “website” or “display store,” to “Amazon Prime” and “subscription.”

Maybe there’s a third column specific to technology, matching delivery mechanisms to each purchase.

The title of the chart is “Data-Enabled Commerce.”

It could also be called “World Domination.”

Now, consider the Columbus Circle outlet (or any of its other book stores) as a testing ground for this strategy…that just so happens to involve books. Amazon has deep insights into what books would appeal to folks who live in the immediate vicinity and/or visit it (look for a large tourist-focused display), just like it knows their favorite toothpaste (and how often they buy it).

Nobody walking through the door will be looking for a particular book, per se, since it’s too easy to go online to buy what you already want (Cast said so in her interview). So what if they discover exactly what Amazon predicted they’d want to buy before they knew they wanted to buy it? The company is doing the discovering, not consumers.

The same testing is probably being applied to its grocery outlets, and on a host of other products, as well as dictating what gets stocked in its warehouses.

Matching supply to demand gets easier when demand is more predictably reliable.

Better yet, the data from Amazon Prime, same-day delivery options, and other experiments can be referenced across channels, so book buying correlates with purchases of diapers, lawnmowers, and whatever else Amazon sells, as well as how it sells it.

Will Amazon maintain a long-term presence in geophysical retailing? Absolutely, but it’ll depend on what types of purchase decisions those stores support. Outlets might end up filled with more variants of fresh lettuce or ready-made pizzas than books; it’ll depend on the micro-local data targeting it applies to each location.

MY bet is that no two stores will be exactly the same, each combining a little Wal-Mart, Pizza Hut, Best Buy and, sure, Barnes & Noble, only mapped exactly to the customers and purchase decisions they support. What will be the same is the trove of data that Amazon collects, applies, and repeats, over and over, so that it can figure out how to own every type of purchase.

It has very little to do with books.