Amazon has frustrated booksellers like Barnes and Noble for years. As the online bookseller transformed the way consumers purchased books, brick and mortar bookstores throughout the country struggled to keep up. But now Amazon is taking to the streets as well, making it an even larger force to compete with.
Today, Amazon opens its first retail bookstore in Seattle. The store is called Amazon Books, and looks just as you'd imagine a bookstore to look. Shelves are packed with over 5,000 titles, including the latest best-sellers and Amazon.com customer favorites. You may think, "So what? Big deal," but it is.
What's most interesting is the business strategy behind Amazon's decision to branch out with physical stores. Since its inception, Amazon has been able to sell books cheaply because of the reduced overhead it maintains by not having stores. So why would it reconsider?
The answer is simple. Amazon believes that it has an advantage over other traditional bookstores. It has been tracking consumer purchasing trends for over a decade and has accumulated a lot of inside data.
Unsold books are a problem that plagues every traditional bookstore. Store purchasers monitor trends as best they can, but the store still winds up with extra books on the shelves headed for the clearance rack.
In a recent interview, vice president of Amazon Books, Jennifer Cast, explained that the company won't strictly use data from the website to determine which books it will stock. While it will include popular titles from Amazon.com, she says, "It's data with heart. We're taking the data we have and we're creating physical places with it."
What she means is that the data Amazon reviews will include more than just award-winning titles, bestsellers and books with 5 star ratings. Customer feedback will also be an important factor. Staff favorites and editors' picks will make the cut as well. It's about the overall experience, which goes beyond numbers.
What do you think? Is Amazon being too bold by stepping into this market, or is this just healthy competition? Do you think Amazon has an advantage over other bookstores by monitoring online purchasing trends? Let us know in the comments.
If you'd like to take an exclusive behind-the-scenes look at how Amazon cranks out orders, check out our video below.