Amazon plans to open up to 400 physical bookstores. The expansion seems to be contradictory with the fact that the startup is the one attributed for the declining physical booksellers.
In November, Amazon has started the plan by the opening of a bookstore in Seattle, its home city, as Reuters mentioned. Sandeep Mathrani, chief executive of General Growth Properties Inc (GGP.N), said, "You've got Amazon opening brick-and-mortar bookstores and their goal is to open, as I understand, 300 to 400 bookstores." The statement was made on Tuesday while replying to a question from analyst after its earnings report.
Mathrani described this plan the same as what Warby Parker or men's dress retailer Bonobos had done in the past by opening physical stores after they made it online. 20 years ago, Amazon began the business as a book retailer. And now, it has expanded into selling more products, from fresh groceries to TV programming. It also has altered the publishing industry through the Kindle, its famous e-reader.
The Seattle Amazon's bookstore provides the chosen books based on the website's ratings. There is also an area for customers to test-drive Amazon's Kindle, Fire TV and different gadgets at the storefront.
Any action taken by Amazon will threaten its rivals, including Barnes and Noble Inc (BKS.N). The bookstore chain is the biggest in the U.S. with its 640 bookstores across the country. However, on Tuesday, its share has dropped at least 5 percent.
The Wall Street Journal said that Amazon would need years to choose locations areas, obtain leasing agreements, and employ staffs if it happened to open hundreds of stores. Buyers will be able to look through books before they purchase them, something they cannot do with the online stores.
One of Amazon's superiorities is its vast online inventory. However, it still cannot fulfill the need to immediately shop at the mall, eventhough Amazon has made some efforts through one-hour deliveries in approximately 20 cities and same-day drop-offs. Besides opening a bookstore in Seattle, Amazon had started physical outlets for its footwear division; Zappos and Quidsi.
Meanwhile, CNET stated that it was not clear where Mathrani got that figure, because Amazon and GGP refused to respond.
Amazon's e-commerce rises at a double-digit pace. More and more people choose to shop from Amazon because it is so easy, cheap, and convenient, resulting to smaller number of people going to the malls.
It can be seen from the sales during the holiday season. Retail sales increased for 7.9 percent, while e-commerce hiked up to 20 percent. If it is true, then Amazon will follow Apple that opened its first Apple Store in 2001, and Microsoft, which already opens more than 100 physical stores in North America.
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