[BRIEF NOTE] On the likely establishment of a chain of physical Amazon stores

[rfmcdonald]

A brief Gizmodo piece yesterday alerted me to the possibility of Amazon establishing a chain of physical bookstores across the United States. There have since been denials from Amazon, but these have been partial and unconvincing. Already, as Bloomberg notes, Barnes & Noble stock has collapsed at news of this new competition.

Barnes & Noble Inc. shares plunged following speculation that Amazon.com Inc. will open hundreds of physical bookstores, potentially thrusting the companies’ longtime rivalry into America’s shopping malls.

The stock fell 9.4 percent to $7.33 in New York on Wednesday, following a 5.4 percent decline the previous day. The rout followed remarks from a mall executive, who said Amazon was planning to open 300 to 400 stores. He later said that his comments weren’t mean to represent Amazon’s actual intentions.

For years, Amazon’s e-commerce empire has put pressure on Barnes & Noble with low prices and convenient shipping. But Barnes & Noble always had one edge: its chain of brick-and-mortar stores. If Amazon does push into shopping centers, the battle will have to be fought on two fronts. And Barnes & Noble is already reeling from sluggish sales and slow adoption of its Nook e-reader.

Marginal Revolution has more, linking to more articles and speculating.

What is the underlying business plan? To make these iconic locations like Apple stores? To treat all future business, in all sectors, as depending on the focality of the company behind it? To start with books, move on to other items, and eventually steal middle-class and upper-middle class consumers away from Walmart? Somehow use these stores to lock people in Amazon Prime? [. . .] Is this overconfident folly, or is it the “for good” return of brick and mortar bookstores to our lives?

This has potentially huge consequences, and not only for bookselling as Marginal Revolution suggests.