Amazon Returns to Roots With Its First Physical Store

Amazon Books will incorporate digital aspects while selling the old school way, in person. Here's what it looks like.
By Rebecca Borison ,

Amazon (AMZN) - Get Report today opened up its first physical bookstore after long being hailed as the predator of brick-and-mortar book retailers.

The e-commerce giant has experimented with physical retail in the past, but either as a temporary pop-up shop or as more of a pickup location rather than an actual store. But Amazon Books, which is located in University Village in Seattle, is the company's first permanent store where consumers can browse and shop.

"We've applied 20 years of online bookselling experience to build a store that integrates the benefits of offline and online book shopping," Vice President of Amazon Books Jennifer Cast said in a letter to Amazon customers.

The store showcases books that have high customer ratings, pre-orders, and sales on on Amazon.com, as well as high ratings on Goodreads. The books are placed with the covers facing out and an accompanying card with their Amazon.com customer rating and a review. The prices are the same as their prices on Amazon.com.

Morningstar analyst RJ Hottovy said he doesn't think Amazon's new store is intended to generate much in the way of actual sales.

"I don't view this as a major revenue initiative and see it more as a brand marketing and customer behavior data endeavor," said Morningstar analyst RJ Hottovy. "I doubt this will have much of an impact on Barnes & Noble and other booksellers beyond the disruption that Amazon's core platform has already caused."

Interestingly, for Amazon's first brick-and-mortar play, it's choosing to go back to its roots of bookselling.

"I think it looks remarkably like how Amazon got started online. Open a bookstore, see what works, build from there," RSR Research Managing Partner Nikki Baird said. "Starting with books makes perfect sense for Amazon -- it's how they won online.

The move also follows a recent debate over whether sales of e-books are starting to decline. Amazon said its e-book sales are doing well, but a physical bookstore could be a way to hedge its bets in case consumers do actually prefer the traditional, physical book experience.

Amazon controls about 42% of the book market overall and 64% of the e-book market, according to Peter Hildick-Smith, founder and CEO of research firm Codex. 

There have been a number of rumors in the past of Amazon opening up stores, including a grocery store in Silicon Valley, but Amazon Books is the first permanent store by Amazon to open its doors.

The store will also sell Amazon devices like the Kindle, Fire TV, Fire tablet, and the Echo. Amazon Books will be open every day except Thanksgiving and Christmas Day.

Here's what Amazon's first bookstore looks like:

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