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It’s Time to Revisit the "400 Amazon Bookstores" Rumor

22537164217_77cc6767e1_hA little over a month ago the WSJ reported on a rumor to the effect that Amazon was planning to open up to 400 bookstores.  The rumor was quickly denied by Amazon, and the source of the rumor (mall operator CEO Sandeep Mathrani) recanted less than 24 hours later, so you would think that the rumor was dead.

But as I sit here reading the latest press release from Amazon, I am reminded of that rumor and am wondering whether it might be about half true.

Oh, I don’t think Amazon is going to open 400 bookstores; Amazon Books is all about the data, and when it comes to generating info about browsing behavior 400 stores aren’t 400 times as useful as a single source (or two, counting the upcoming store in San Diego).

But Amazon’s pickup locations, on the other hand, are a separate matter.

Amazon announced on Friday that it was opening a pickup location just off the campus of the University of Akron. That’s their ninth location announced in the past 18 months, and the rate is increasing. Amazon has opened five unstores since last February (Purdue) and they plan to open four more by the end of this summer.

That’s nine announced locations, compared to a single bookstore (Amazon has not announced the San Diego bookstore yet).

So tell me, what are the chances that the rumored 300 to 400 stores actually referred to pickup locations?

Before you answer, let’s revisit the original source. Here’s the quote from General Growth Properties CEO Sandeep Mathrani in a more complete context. Note the reference to "the last mile":

And just case in point, you go to Amazon opening bricks and mortar book stores and their goal is to open as I understand 300 to 400 book stores, and it should sit back and say that the last mile is all important, which is why Bonobo’s is opening bricks and mortar stores and Warby Parker is opening bricks and mortar stores and Birchbox is cutting their overhead to open bricks and mortar stores.

In this instance, "the last mile" is a term used in supply chain management and transportation planning (Wikipedia). It refers to the most expensive part of the delivery cost. That would be the last mile of a trip, i.e. the segment between your front door and the local FedEx/UPS distribution center.

The reference to the last mile in the above quote never really made any sense in relation to Amazon Books (although some went to bizarre lengths to invent a connection).

Amazon’s bookstore carries only a limited number of books, and isn’t designed to serve the rest of Amazon’s online business. You can’t even buy a book on and pick it up in store, so Amazon Books is clearly not a "last mile" solution.

Do you know what is a solution?

Amazon delivery lockers in your local convenience store. Also, delivery drones.

And last but not least, Amazon’s pickup locations.

Mathrani’s mention of the last mile makes a lot more sense if we assume that it refers to pickup locations rather than bookstores. Each of those locations becomes Amazon’s local CS center where customers can pick up packages, return orders, and get technical assistance.

Those would be great reasons for Amazon to open 300 to 400 locations, don’t you think?

I think so, and just to put that number in perspective, let me lay some statistics on you.

UPS has over 3,000 UPS Stores in the US, and FedEx has 1,800 FedEx Kinko’s stores. That’s 4,800 locations where you can ship or pick up a package. In comparison, Amazon is rumored to have a goal of opening 300 to 400 stores.

All of a sudden, that figure no longer looks wildly unlikely plan; instead it is positively parsimonious compared to the giants in the industry. It is less the reinvention of the big box retailer, as Yglesias suggested in the link above, than it is an adaptation of the Apple Store concept.

Which again, fits with Mathrani’s statements.

I know that I disbelieved Mathrani when the story first broke, but in light of recent developments I think I got it wrong.


image by SounderBruce

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fjtorres March 4, 2016 um 6:34 pm

You’ll get no pushback from me.
I’m the one who thought Amazon picking up a major chunk of Radio Shack leases made sense.

So, a couple dozen Amazon Books + 400 unstores is something they can deploy in a couple years and build off that. Add in their delivery experiments and it all fits nicely.

Mike Hall March 4, 2016 um 7:22 pm

I’m intrigued by the apparent differences in their approaches in the USA and the UK (I say apparent because I may simply be ignorant of or misunderstand what is happening in the US).

On the links across the top of the page normally include "Amazon Pickup Locations". Click on this and you are told that there are over 15,000 locations at which you can click and collect (or return). These are mostly small shops, post offices, etc. and would seem to be equivalent to the delivery lockers in local convenience stores to which you refer. These are pretty convenient if you live in a city or town (for example, there are at least four within a short walk from my home).

What we do not seem to have are what you refer to as "Amazon pick up locations" and I’m not sure why these are needed in the US but not, so far, in the UK. Do they do a lot more than delivery lockers? Can they ever serve more than a fraction of the population or are they just a specialist operation at locations where large numbers of customers pass by?

Nate Hoffelder March 4, 2016 um 9:18 pm

It’s weird, isn’t it?

I can’t tell you why we don’t have your delivery options over here. Weird thing is, Amazon has similar options in India – but not Canada.

Mackay Bell March 5, 2016 um 2:56 am

I already regularly use the Amazon locker at my nearby 7/11. It’s actually better for home delivery for me (I live in an apartment and don’t want stuff left out the door or by the mailboxes).

Also, now that they have a presence in those stores (which I’m sure they pay plenty for), what’s to stop them from putting up a small rack of best selling books? 7/11 customers are not generally known for their literary tastes, but Amazon locker customers might be interested in hot best sellers.

Might even be better than Lee Child’s airport racks.

fjtorres March 5, 2016 um 6:11 am

Book vending machines.
Big touchscreen displays cycling promos for a select few titles that will sell you either a pbook or ebook edition.

Nate Hoffelder March 5, 2016 um 6:15 am

That sounds like the self-serve POD machine I think Amazon is working on.

The ebook half would be harder to accomplish, however.

fjtorres March 5, 2016 um 6:54 am

I think it would be the easiest:

1- Insert credit card associated with ebook account
2- Touchscreen pops up a keyboard, you enter ebook account email

In-store wi-fi and a high-priority delivery channel on the servers does the rest.

They can take it one step further for neighborhoods with limited internet access/no credit card: use the machine to order any product, pay with Amazon Gift Card, pickup 24 hours later.

The combination of lockers and on site vending with next-day delivery be very powerful, especially in lower income areas. Big untapped market.

(Back in my hometown, CVS came in recently and sited their pharmacies right across the street from public housing projects. They do, ahem, gangbuster business. 🙂 No reported cases of vandalism or holdups despite being high crime areas.)

Nate Hoffelder March 5, 2016 um 1:40 pm

I think you forgot why Amazon went with such a drop dead simple setup for the Kindle Store. What you describe is beyond what most people can do, or want to do.

fjtorres March 5, 2016 um 4:51 pm

That wouldn’t be a replacement for reader or app-based sales. It would be a marketing move: somebody walks into the unstore, sees a book they might like, they order on the spot. Why make them wait to get home or log into the phone.
Impulse buys add up…

puzzled March 5, 2016 um 5:42 pm

Because you already have an Amazon ereader, so you can just order from that. Or your phone. Or tablet.

I can see general browsing kiosks. But then you have stuff that breaks and has to be maintained.

Katharine March 7, 2016 um 5:00 pm

Sounds good! I’m guessing, though, that people who really live on the real last mile will have to drive many more miles to get their stuff, though. 400 won’t be enough.

Nate Hoffelder March 7, 2016 um 5:10 pm

Yep. I think this is only going to have about the same coverage as Amazon’s same-day delivery service.

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