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Amazon to Open Pickup Location at the University of Wisconsin Madison

Amazon has struck a deal with the University of Wisconsin-Madison for the exclusive right to open a staffed pickup location on the UW-Madison campus.

The retailer has promised to pay the university a minimum of $100,000 a year under a contract which runs for five years, and plans to install its new staffed pickup facility in the Red Gym (the brick castle pictured below).

Red_Gym

This is the second new location announced this week, and will be Amazon’s eighteenth unstore when it opens later this year. The location will feature kiosks where students and faculties can place order, banks of lockers for receiving packages, and a staffed support desk.

Coincidentally, the Milwaukee Journal Sentinel reports that Amazon had told university officials that it would lease an off-campus location if the university was unable to provide one. The paper also said that the independently-operated UW-Madison bookstore had tried to negotiate an agreement with Amazon to set up shop in its building but could not meet Amazon’s needs.

The size and specific location of Amazon’s new facility has not been disclosed, but we do know that they’re going to have to install a ramp, and of course the lockers.

Given that the Red Gym is a registered National Historic Landmark, this could present a problem. Structural alterations and improvements might need the approval of the U.S. Park Service and/or the Wisconsin Historical Society, in addition to the university.

image via WikiCommons

This Wisconsin University Launched a Bookstore Without Books

eCampus.com at UWM KiosksFor some unknown reason many people are convinced that only Amazon could open a college bookstore with no books, but that simply isn’t true. Amazon has several competitors currently disrupting the college bookstore industry, including eCampus and textbook distributor MBS Direct.

Owned by B&N founder Len Riggio, MBS Direct offers a virtual bookstore platform which dispenses with a physical location entirely. It has signed private high schools as well as colleges and universities like Liberty University, including most recently Chadron State College in Nebraska.

CSC announced this week that it was opening the virtual bookstore just in time for the fall term. Its previous bookstore operator  had been sold, and after investigating the various options CSC concluded that online was clearly the best choice for students.

“We are pleased to be working with MBS Direct and expect to provide students with affordable and reliable service into the future,” said Dale Grant, Chadron State College vice president for administration and finance.

The space occupied by the bookstore in the CSC Student Center will be taken over by Outlaw Printers, a Chadron, NE -based printing service. It has a contract to operate a store which carries CSC-branded merchandise – but not books. The store will look a lot like a traditional college bookstore – just without the textbooks and class materials.

When it comes to college bookstores Amazon is getting all the press, but what the media isn’t telling you is that the college bookstore industry is facing serious disruption as college students buy more and more stuff online. College bookstores are closing left and right, including a bookstore in the college town where I grew up.

Jayhawk Bookstore has been serving students at Kansas University for decades, but it closed this summer. Its owners noted that instructors have been changing how assign course material for their classes. "There’s also more a drive towards using course packets, smaller chunks of information from different sources," said Jeff Levin, co-owner of Jayhawk Bookstore.

Levin also reported losing business to online retailers like Amazon. "The landscape of retail in general has been changing, in particular college textbooks. It’s not just traditional textbooks. There are obviously e-books and rental books," Levin said.

That shift to online retailers has lead a lot of colleges and universities to replace the traditional college bookstore with either an online virtual store or with a book-less pickup location.

As I’m sure you know Amazon has plans for fourteen unstores at US colleges and universities, including most recently at the University of Illinois Urbana-Champaign, but in this area they are dwarfed by eCampus. The latter has a Virtual Bookstore Program which currently serves as the official bookstore for over 150 schools nationwide. Many of the schools went the way of Wilson College, whose bookstore is completely virtual, but others chose to also have an Amazon-style pickup location.

For example, the University of Wisconsin Milwaukee elected to have eCampus put in a virtual bookstore when the vendor won the contract bid last August.

As you can see in the photos, it looks not dissimilar from the Amazon unstores which dot the college landscape. It has kiosks, a service counter, and UPS delivery boxes (in place of Amazon’s delivery boxes).

eCampus promises delivery within two business days (without any pricey membership fees). Students are notified of a textbook’s arrival by email or text message,  and they  can come to the store to pick up their order before heading off to class.

This, folks, is the future of college bookstores, one where almost everything is bought online and where the college bookstore is reduced to little more than a gift shop and a convenience store.

If you are in love with the idea of bookstores, that might sound frightening. Me, I can recall just how much textbooks cost and how little value I got out of a college bookstore, so it bothers me not at all.

Amazon to Open New Pick-up Location at University of Illinois at Urbana-Champaign

Illini Union Bookstore amazon unstoreAmazon announced their 14th college campus unstore on Monday. It’s going to open this fall in Urbana, Ill., at the University of Illinois.

The 2,200-square-foot space will be located in the Illini Union building on the UIUC campus. It’s going to be a staffed pickup location where students and faculty will be able to pick up and drop off  Amazon packages.

“We are excited to partner with Amazon and add this level of service for students, faculty, and staff on campus,” said Renée Romano, vice chancellor for Student Affairs at Illinois. “The Illini Union Bookstore location is perfect to offer convenience and security in the heart of campus.”

Amazon Prime members will get free Same-Day Pickup for orders placed by noon and free One-Day Pickup for orders placed by 10 pm the night before.

“Amazon@Illinois will offer students a pickup location centrally located on campus to easily get their merchandise ordered through Amazon,” said Ripley MacDonald, Director of Amazon Student Programs. “We are thrilled to offer the Urbana-Champaign community more opportunities to save on their overall costs along with great customer service, better selection and convenience.”

This is going to be Amazon’s fourteenth unstore. They’re announcing the locations at a rate of just over one per month, and the rate is accelerating. Even so, they’re still years away from reaching the 400 pickup locations I expect them to open.

Amazon to Open Third Amazon Books in Portland

22537164217_77cc6767e1_hAmazon has opened or announced over a dozen unstore pickup locations in the past 18 months, but they’ve only announced two bookstores. Now we can report that a third bookstore is in the works, this time near Portland, Oregon.

Fortune has the scoop that Amazon’s third bookstore will be located in the Washington Square Mall in the suburb of Tigard, Oregon. The news was revealed by several job listings for managers and store clerks on the retailer’s employment website, and Amazon has confirmed the news in a statement. "We are excited to be bringing Amazon Books to Washington Square, and we are currently hiring store managers and associates. Stay tuned for additional details down the road."

Amazon has already opened one bookstore, in Seattle, late last year. They have also announced plans to open a store in San Diego, and hinted at plans to open one in Berlin. But the retailer has not said when it will be opening the stores, nor has it said how they will be used.

The job postings for the Portland store, however, suggest that it will be based on the same model as the Seattle store. That store, which is located in an upscale mall, carries a mixed stock of books and Amazon gadgets and is focused less on selling a lot of books than on gathering data on browsing behavior.

It stocks fewer books than most bookstores its size, and uses its space to place books face out on the shelves, rather than spine out. Each book has a shelf tag which contains a book’s Amazon.com rating and snippets of customer reviews. It does not, however, show the price. Customers are encouraged to use the Amazon app to check prices.

It is unknown whether the Portland store will follow the same model. Stay tuned.

image by SounderBruce

 

Amazon to Open Pickup Location Near Texas Tech U.; B&N to Open New Store in Ashburn, VA

25840491056_4ef8b9434d_hAmazon’s physical empire continues to grow, and B&N continues to experiment with new stores.

Amazon put out a press release on Thursday announcing that they’re opening another pickup location in Lubbock, Texas, near Texas Tech University.

Opening in Fall 2016, this approximately 2,700-square-foot space will be located at 2407 Ninth Street, centrally located near the university and easily accessible to students and the greater Lubbock community. Additionally, Amazon Prime members will receive Free One-Day Pickup on millions of items. Students can sign up for an Amazon Prime Student membership and get a six-month free trial followed by 50% off the regular price of Prime. To learn more, visit amazon.com/joinstudent.

“We are thrilled to bring an Amazon pickup location to the Texas Tech and greater Lubbock community,” said Ripley MacDonald, Director of Amazon Student Programs. “Whether students are ordering textbooks, electronics or snacks, Amazon will provide a convenient and secure spot for them to pick up their stuff at hours that work with their schedules.”

It is, I believe, their fifteenth such location on or near college campuses. That is far short of the 400 unstores I expect Amazon to eventually open, but Amazon is announcing new locations every month.

In related news, the story of a new B&N store crossed my desk yesterday.

Patch.com reminds us that B&N is building a new store in the One Loudon development in Ashburn, VA. The deal was struck last year, and construction is currently underway:

One Loudoun in Ashburn has landed Barnes & Noble as one of its retail anchors.

The book retailer will open an 18,000-square-foot standalone store at the mixed-use development in 2017, according to a One Loudoun spokeswoman. Construction is expected to begin in 2016.

The store is set to open next year, and it will be B&N’s second new store in the region following the launch of a new-format store in Fredericksburg, VA.

B&N hasn’t responded to queries about the new store, but I do know that the Fredericksburg store features a new layout with a lighter color scheme in tan and cream rather than the dark hardwood and dark wallpaper found in most B&N stores.

The retailer has previously said that they plan to open digital prototype stores, and they could adapt the new location for that purpose. But B&N is also experimenting with other ideas, including a store with a liquor license and another with an attached restaurant, so the new store in Ashburn could end up following a completely new idea.

image by THE Holy Hand Grenade

B&N Education’s New Cosmetics Dept is the Death Knell for the College Bookstore

barnes noble education cosmetics sectionOver the past five years B&N has been replacing more and more of the books in its retail stores with pasta, 3d printers, alcohol, and other merchandise. It’s gotten to the point where I’m not sure if you can call B&N a bookstore chain any longer, and now the college bookstores run by B&N Education are heading down the same path.

Spun off from B&N last year,B&N Education runs about 700 college bookstores, and now two retail stores. It announced today that it has ripped out part of two stores and replaced the books with a new cosmetics department. It’s calling its on-campus beauty concept The Glossary, and describes it as  a "distinct store within select Barnes & Noble College bookstores". They’re saying its the first of its kind dynamic shopping environment which lets students explore, sample and purchase a wide variety of mass-market and prestige beauty products on a growing number of college campuses nationwide.

First?

Maybe in college bookstores, but not elsewhere.  What with drug stores, big box retailers, and even grocery stores now carrying cosmetics, it’s not exactly a new idea.

barnes noble education cosmetics section

Furthermore, it’s not a new idea in college bookstores, either, because once you add a cosmetics section we’re no longer talking about a college bookstore. It’s still a store, but now it’s just a retail operation rather than a bookstore.

It’s one thing to have Nook displays; one can read ebooks on them. But cosmetics have nothing to do with a bookstore, and once they’ve been added to a store it is a sign that the store management’s focus has shifted from being a bookstore to simply being a retailer of whatever sells the best.

So do you think this is going to spread?

I have doubts that cosmetics will work well in this market, but if it’s not this then it will be something else. B&N Ed is signalling that they want to shift the stores and sell different products which are more profitable than books.

What do you think would sell well in a former college bookstore? Amazon return mailing boxes and tape?

Joking aside, B&N Ed is being affected by the same forces that have lead several universities to replace their bookstore with an Amazon unstore, and why an even larger number are leasing space to Amazon.

College retail isn’t the sinecure some analysts would claim; it is just as much in flux as the broader retail industry, only with the added pressure of college students being more inclined to shop online in pursuit of a good deal.

You can expect to hear of other concept pilot tests in B&N Education stores in the not too distant future, I would bet.

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 Amazon.com 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.

Thoughts?

image by SounderBruce

Amazon’s Ninth Pickup Location to Open Near the University of Akron

amazon pickup location akron ohioAmazon may only have a single bookstore (with a second one in the works in San Diego) but their non-retail brick-and-mortar efforts are growing by leaps and bounds.

On Friday Amazon announced that over the summer it will be opening a new unstore in Ohio, just off the campus of the University of Akron.

Amazon@Akron will be located in a two thousand square foot space to the south of the university at 290 East Exchange Street, just across the street from the athletic fields. According to Google Maps, the space is in a relatively new mixed-use five-story building (shops on the first floor with apartments above).

It’s going to be surrounded by student housing, and it will be competing with University of Akron’s existing bookstore, which is run by B&N. The second Amazon pickup location in Ohio, Amazon@Akron offers the UA community a convenient location to pick up and return Amazon orders, including virtually everything a student needs from college essentials to technology.

This is Amazon’s ninth announced pickup location, and the second one announced this week. A few days ago Amazon announced an unstore at UT Austin, and they also plan to open unstores at UC Davis and the University of Pennsylvania later this year.

“We are excited to bring Amazon@Akron to the UA and greater Akron community,” said Ripley MacDonald, Director of Amazon Student Programs. “Whether students are ordering course materials, electronics or mac and cheese, Amazon@Akron will provide a convenient and secure spot for them to pick up their stuff at hours that work with their schedules.”

Amazon also currently operates five pickup locations. Three of the unstores are located on the campuses of Purdue University, UM Amherst, and UC Berkeley, and two are located just off the campuses of UC Santa Barbara and the University of Cincinnati. (You can find more details here.)

Never have I wished I lived in a college town more than I do right now.

College Bookstores Are Caught Between a Rock and a Hard Place

4588970743_c7de1c9e41_bOnce a de facto monopoly, college bookstores now have to contend with increased online competition and the resulting declining revenues. They also have the problem of publishers bypassing them to deal directly with students, and now those same publishers have found a new way to sabotage college bookstores.

A couple reports have crossed my desk this week concerning textbook shortages in college bookstores. The bookstores at the University of Montana and at Wheaton College in Illinois are having trouble keeping textbooks in stock.

It’s not so much that they are facing unprecedented demand for textbooks as that they can’t estimate the demand and can’t afford the financial hit from ordering too many textbooks:

English and Bible and theology classes, especially entry-level classes, are currently experiencing the most textbook shortages because of fluctuating enrollment and schedule changes.

So why doesn’t the bookstore just buy more books? “Full returns just don’t exist anymore,” Bentz said. “The return policies of publishers and wholesalers limit returns to 20 percent.” Because all money for ordering books comes from Wheaton College, returning overstocked textbooks would ultimately result in a loss of money for the college and an increase in prices for students in subsequent semesters.

The UM Bookstore has a similar problem:

Fifteen to 20 years ago, the UM Bookstore would receive the student capacity for a given class, as well as the number of students enrolled, well before the first week of classes. Those two numbers were always nearly the same, so the Bookstore could make accurate book orders. If those numbers weren’t available, they could make an estimate based on the number of students who bought books for the class the previous semester. Additionally, it was more feasible to return books that weren’t purchased than it is today.

“Today, students register for classes later, and the number doesn’t always match up with the class capacity, which makes it more difficult to predict,” Aliri said. “In the case of many publishing companies, we can only return 10% of the original textbook order. At one point, we had $100,000 of non-returnable inventory.”

To be clear, these are the only two reports I have found where college bookstores failed so badly that the textbook shortage situation came to the attention of student newspapers, but they’re almost certainly not the only college bookstores caught between a rock and a hard place.

And both reports describe this as a new phenomenon.

The stores run by B&N and Follett are likely immune to the returns issue (each company has its own warehouses), but even those stores have a problem with matching textbook orders to enrollment. Nationally, about 65%  of students won’t buy the required book for at least one of their classes, and they’re not buying them from bookstores. According to the Montana Kaiman, only 55% of those who purchase textbooks buy from the UM Bookstore; the other half shop online.

Multiply that across the estimated 20 million college students in the US, and we begin to get the impression that college bookstores are in much the same state as retail bookstores.

Neither is going to die out immediately, but they’re not nearly as healthy as they were ten years ago.

In the case of college bookstores, they’ll always have a lock on impulse purchases, but planned purchases like textbooks are moving online. Students are extremely price-sensitive, and if they can get a lower price online then they will do so.

And that’s good news for Amazon (as well as its competitors like eCampus). Amazon now has five "unstore" pickup locations on or near US universities, and they also have most of the rest of the schools covered by delivery lockers. Some of those lockers are located on campus, but an even larger number are located just off of college campuses (7-Eleven stores, for example).

But it’s not so good for all of Amazon’s competitors. B&N Education, for example, finds its revenues limited by the pool of financially-strapped students who are increasingly shopping online. (If you were wondering why B&N spun off B&N Education last year, I think we have the answer.)

B&N Education  responded to the online threat by adopting a price-matching policy where students can get the best price on their textbooks, but that is less a solution to the problem than an acknowledgement that they’re losing revenue to their cheaper online competitors.

Follett has a similar policy in some of its stores, but again the only real way to compete with online retailers would be to lower all the prices to the point that students won’t need to check online (and that is probably not a financially viable solution).

O O O

While we’re on the topic of bookstores, was anyone else surprised to learn that publishers and distributors are limiting returns from college bookstores?

What are the chances that might spread to retail bookstore, which currently enjoy an almost unlimited option to return unsold books?

image by Artin Gal

 

San Diego Booksellers Bemoan the Imminent Arrival of a Local Amazon Bookstore

22942103802_eeaef78cd7_hWe’ve known since Wednesday that Amazon is planning to open a retail location in San Diego (and judging by the related job openings, that is only the beginning), and booksellers in the San Diego area aren’t happy.

The San Diego Union-Tribune reported on this story yesterday in an article rife with ant-Amazon propaganda, hostility, and errors (an early version of the piece referred to the Amazon Nook – no joke).

The piece is generally not worth reading, but there were a couple nuggets of useful info, including confirmation that Amazon is looking for retail space in the area. Reg Kobzi, senior vice president for commercial real-estate brokerage CBRE, confirmed the report but could not comment further due to a confidentiality agreement.

Amazon’s imminent arrival has some local booksellers responding with expected hostility. According to Mysterious Galaxy co-owner Mary Elizabeth Yturralde, Amazon should be investigated every time Jeff Bezos takes a deep breath, changes his pants, or has an extra cup of coffee at breakfast.

"Anything that Amazon does is something that needs to be viewed with concern because of their predatory business model," said Yturralde. "They operate in the Walmart mode where they don’t add any value to any community they move into.”

No value – except for the jobs, low prices, and tax revenue in local coffers. But none of that is worth anything to anyone.

Of course, not all of Amazon’s competitors are afraid, and some are downright unconcerned. Reached for comment, the co- founder of Powell’s Books in Portland Oregon was indifferent at best.

“We did check out the store in Seattle, and found their model not very compelling to us,” said co-founder Michael Powell, whose flagship store has an inventory of a million titles spread across 70,000 square feet. “I’m not in any panic mode. We’ve survived Barnes and Noble, I think we can survive Amazon.”

Adrian Newell, a book buyer at Warwicks in La Jolla, is described as not being happy about Amazon moving in either, but she was able to move beyond the initial reaction to make the astute suggestion that Amazon is interested in meet-the-author events. “That’s the one thing they haven’t been able to duplicate,” she said. “Otherwise, why would Amazon take on the additional costs of leasing space?”

That’s a novel idea, but so far as we know Amazon has been using its only retail bookstore less to engage with authors and more to gather data on how consumers browse for books. And what with traditionally published authors (and Big Five authors in particular) running the risk of being blacklisted if they held an event at Amazon Books, there won’t be a lot of demand for events.

Frankly we don’t know how Amazon will be using the space.

Edit: But that hasn’t stopped some from speculating.  Writing over on his blog "I love my Kindle", Bufo Calvin has thrown together a list of all of Amazon’s promotional and physical retail  activities and proposed that Amazon should do it all under one roof:

  • Showcase books, like they are doing in Seattle
  • Show off Amazon devices, which might include simulated rooms, like you can see in some electronic stores
  • Amazon lockers, where you pick up some things you order online before you get there
  • Have a Fed Ex store part of it, to handle returns, but whatever else you wanted to ship
  • Maybe have a print-on-demand machine, to do print books
  • Perhaps have a sort of test kitchen/coffee place, but I’m not sure about that. It would help them to have people try some of the things online
  • Amazon’s “home of tomorrow”, showing off possible future things, including doing focus groups
  • Author talks by Kindle Direct Publishing/Amazon imprint/Amazon independent paperbook authors

Some of these don’t make any sense to do under the same roof. For example, consumers tend to treat POD in a store more like a print shop then a bookstore, so there’s little reason to include a POD machine in a bookstore. And Amazon lockers don’t have to be co-located with a bookstore, so it would make more sense to place the lockers a couple miles away where rent is cheaper.

The test kitchen and "home of tomorrow" are kinda like what Amazon has done with pop up stores in the past, and they’re space intensive. But if you combine that area with the author event space, you might be able to kill two birds with one store.

And as for the FedEx store idea, that’s just another name for the unstores Amazon is installing on and near college campuses. It doesn’t really serve the same market (but it also doesn’t necessary require a lot of space so why not include it).

But no matter how Amazon uses their stores, the Union-Tribune’s Lori Weisberg opines that "Amazon’s brick-and-mortar business plans, then, are sure to make the company even less popular" with certain parts of the book industry.

I for one am looking forward to seeing what that would look like; I have trouble imagining how Amazon could be more hated than they are now. I mean, in the past six months we’ve seen a biased report on Amazon’s supposed negative impact on local tax revenues, a farcial letter to the DOJ, and (just last week) a recital where Amazon’s evilness was the main topic.

What could Amazon’s detractors do next to show they dislike Amazon, start making Amazon’s employees disappear under mysterious circumstances?

I really don’t see how Amazon could be more hated by their competitors (and suppliers), but that doesn’t extend to its customers. Amazon has always scored high with consumers, and based on the 4.2 star Yelp rating for the Amazon Books location in Seattle, consumers are pleased with Amazon’s first bookstore.

coming soon to a shopping center near you?

coming soon to a shopping center near you?

That store carries around 5,000 titles (as well as Amazon’s gadgets) in a 7,500 square foot space, or about a tenth as many titles as the average indie bookstore would squeeze into the space, and most consumers don’t seem to mind the limited selection nearly as much as Amazon detractors. This includes John Mutter of Shelf Awareness, who said that "For the amount of space Amazon has, (the store’s selection) felt kind of skimpy".

Will Amazon future stores receive similar mixed reviews?

It’s hard to say, but one thing we can safely predict is that Amazon wants to open more retail locations. The latest rumor suggests that Amazon has plans for other types of stores besides bookstores, and that rumor is born out by the job listings mentioned in the first paragraph of this post.

According to Amazon’s site, Amazon Books (apparently the name for the broader brick and mortar program at Amazon) is looking for a data engineer, financial analystsenior program manager , and curators for literary fiction, nonfiction, and children’s books.

"Join the team that just launched the first-ever Amazon Books retail store. We’ve applied Amazon’s 20 years of online bookselling experience to build a store that integrates the benefits of offline and online book shopping," the listings say. "Our doors opened November 3rd and it is very much still Day One. We are looking for entrepreneurial, analytical, creative, flexible leaders to help us make Amazon Books the world’s most customer-centric bookstore and a place that customers love to shop."

Those positions are all head office jobs and will be based in Seattle, and that suggests that Amazon is going to have enough stores in operation to justify the overhead.

Amazon is rumored to be planning to open a dozen or so stores over the next couple years, and given the confirmed details we have now I’d say those rumors are all but confirmed.

images by SounderBruce

The Academic Print Book is Dying, and It’s Killing Off College Bookstores

Any Amount, After Dark (Charing Cross Road, London)A UK college bookstore is witnessing first-hand the trend that many are seeing in academic print books: the market is dying.

The Bookseller reported on Tuesday morning that a bookstore called "The University Bookseller, Plymouth" closed its doors for the last time on 18 December.

Originally opened in 1973, the store was part of an eclectic chain of bookstores owned by Ron Johns. The other stores will remain open, but this store has seen declining revenues over the past five years and is no longer profitable.

The owner reports that between the changes in the market, inadequate discounts, and publishers bypassing retailers to deal direct with universities, the store simply could no longer operate.

“We were finding it impossible to run a bookshop on 30% discount from publishers,” Johns told The Bookseller. “What also doesn’t help is that information is now available everywhere. When you ask a young person to find something out, they do not go to a bookshop for a book, they don’t even go to Amazon, they go to Google to find out instead. The knowledge industry has substantially changed. I really cannot see that anybody has a job in selling textbooks to people in the future.”

Given the reports of publishers uploading their own books to Google Books, and that other parts of nonfiction publishing have already reported that the web was killing their sales, at least part of this report comes as no surprise.

And neither is the general story of another indie bookseller closing up shop. This bookseller was in the rare position of having no actual connection to its local university. It’s not owned by the school and, unlike a number of US college bookstores,  it’s not even a nominally independent part of the school.

And so it was in a unique position to be cut off by the university when the school was trying to cut costs.

Johns added “We had a breakthrough with Plymouth University when it gave its students an electronic card to spend money in our shop, but the institution found it was cheaper to buy e-books for the students directly from publishers, so that’s what it did.”

And it’s not just digital, nor is the problem restricted to just books. Many schools in the US are finding that students just aren’t shopping in college bookstores like they used to. This has led some to partner with Amazon, or with eCampus, and replace their bookstores with a smaller unstore where students can pick up online orders.

All of those reports are from the US, of course, but as we see today the same trend is affecting the academic book market in the UK. And there’s every reason to expect the trend to continue, and to grow.

image by takomabibelot

Amazon is Looking Into Opening a Bookstore in Berlin

Amazon’s second bookstore could open in Berlin, or at least that is what German media is reporting on Monday morning.

amazon_retail_store[1]

Der Tagesspiegel published a brief interview today where they asked Amazon Germany boss Ralf Kleber about the current state of the company. The piece is short but it does include this gem: "Setting up shops was always an option. Berlin would be a top candidate for an Amazon store," said Kleber. "In no other German city do we have so much invested," he added, before going on to note Amazon still sells a lot of print books online, and that "people will always buy offline. The customer should have the choice."

So tell me, does that sound like true interest from Amazon, or do you think that the journalist is more interested than Kleber?

Amazon opened a bookstore in Seattle just last month, and they’ve also installed kiosks or opened pop up stores in Paris, California, and China, so we do know that they are showing interest in brick and mortar retail.

But we also know that Amazon is a cautious company that experiments on a small scale before taking a service international or making it widely available, and there’s a huge difference between kiosks that will close after the holidays and a permanent bookstore.

Their Seattle bookstore is only a month old, so it’s far too soon to say whether the idea works in the US, much less elsewhere in the world. Sure, some consumers are clamoring for an Amazon store, and Amazon is gradually opening additional unstore locations, but a bookstore would still be a more expensive commitment – one which Amazon might not want to make.

The Amazon Books bookstore in Seattle stocks around 5,000 titles, all of which are shelved face out, and promoted by a shelf label that draws on online reviews from Amazon.com and Goodreads. There are no prices in the store; instead customers are encouraged to use their smartphones and Amazon app to check prices and look up other details. Yes, Amazon encourages its customers to showroom its own store, thus making it easier for the retailer to collect data about their browsing habits (arguably the real reason Amazon opened the store).

So the real question to ask is this: Does Amazon want to collect similar data about German consumers?

Amazon Opens a New Chapter in its Retail History

Remember that bookstore that Amazon was rumored to be building in Seattle?

It officially launched today, and is opening tomorrow.

Amazon has sent out a letter to their Seattle area customers with the news that Amazon’s first bookstore, located at in the University Village shopping center at 4601 26th Ave NE, is no longer rumor or speculation (you can find the letter here).

Unlike Amazon’s past retail efforts, which focused on vending machines, delivery lockers, and pickup/dropoff unstores, the new Amazon Books has actual books in stock on its shelves, as well as Kindle ereaders, Fire tablets, and other Amazon hardware.

image via the Seattle Times

image via the Seattle Times

The Seattle Times got an early look at the store, and they report that the store won’t double as a pickup/drop-off location. It’s strictly a retail store, and according to Jennifer Cast, the VP of Amazon Books, the store won’t be stocked solely on data. "It’s data with heart,” she told ST. "We’re taking the data we have and we’re creating physical places with it."

The books carried in the 7,500 square foot store are chosen based on Amazon.com customer ratings, pre-orders, sales, popularity on Goodreads, and Amazon’s curators’ assessments. All of the books are face out on the shelf, and under each book is a presentation card with the Amazon.com customer rating and a review.

amazon bookstore

Amazon is also including a special staff favorites section that will change periodically. For the opening, the section includes a few of Amazon CEO Jeff Bezos’ favorite books, including The Five Love Languages by Gary Chapman, Traps by his wife, MacKenzie Bezos, and The Gift of Fear by Gavin de Becker.

The books will be sold at the same price as found online.

To put it simply, Amazon is taking what they’ve learned from twenty years of selling books online and is adapting it to the offline world. In a time where most bookstores arguably are no longer bookstores (just look at how much B&N floor space is devoted to toys), Amazon is going to show their competitors just how bookstores are supposed to work.

Or at least that is what Amazon is hoping; whether it will work out is a different matter.

Amazon has chosen an expensive location for its first store. University Village is an upscale shopping center that used to be the home to a Barnes & Noble store (it moved out four years ago when its lease expired and rent went up).

With the high rent, the odds are stacked against this store being a success based on the numbers, but Amazon has been known to run pilot operations before expanding.

Unfortunately for us, Cast declined to reveal Amazon’s plans, including possible locations. “We’re completely focused on this bookstore,” Cast told SA. “We hope this is not our only one. But we’ll see.”

Barron’s Over-Estimates the Prospects of B&N Education

7235467826_74cd4269fc_hLate last week Barron’s published one financial analyst’s take on B&N Education, the college bookstore division that was spun off of B&N earlier this year.

B&N Edu operates about 740 college bookstores  in the US, and that analyst thinks that it is under-valued by half. But his article is behind a paywall, so I hadn’t been able to read it. Luckily a reader has helped me figure out that the paywall is porous and could be bypassed through Google (thanks, K!) so I now have the text of the article and am ready to respond.

Oy, vey.

When I first expressed interest in the article last night, I jokingly asked whether its author was aware of an invention called the internet. It turns out my joke wasn’t too far off base.

Here is why Andrew Bary thinks that B&N Edu is under-valued:

“It’s an attractive business with high barriers to entry because of the physical presence on college campuses and an early movement into the digital space,” says Alex Fuhrman, an analyst with Craig-Hallum Capital Group. He sees “store growth, same-store-sales growth, and margin expansion” ahead. He has a Buy rating on the stock and a $25 price target.

The company is bite-size by retail standards, with a market value of $600 million and revenues of $1.8 billion in its latest fiscal year ended in April. The company had a debt-free balance sheet with $16 million of cash on Aug. 1.

It is inexpensively valued at six times this fiscal year’s expected pretax cash flow (earnings before interest, taxes, depreciation, and amortization) of $92 million. The cash flow is depressed by a projected $26 million of annual spending on Yuzu, its venture into the nascent digital-textbook market. Yuzu is also depressing reported earnings, which could total about 45 cents a share in the current fiscal year ending in April 2016.

Barnes & Noble Education operates bookstores on 736 college and university campuses around the country, including those at Harvard, Yale, University of Pennsylvania, Clemson, the University of Michigan, and Texas A&M. And there’s plenty of room for growth, since about half of all college bookstores—including UCLA, Princeton, and Wisconsin—are still operated in-house. “We have a low-risk and steady business model and large upside for growth,” says CEO Max Roberts.

THE STORES OFTEN HAVE A NEAR-MONOPOLY POSITION on campuses, offering textbook sales and rentals, collegiate apparel, and related gear, food, and convenience goods. Collegiate gear accounts for over 25% of sales and is quite profitable. The company is No. 2 in the industry behind the privately owned Follett, which operates over 1,000 stores.

I will grant you that the financial details look good right now, but I would also remind you that Nook Media looked great when it was first spun off. And where is it now?

And as for the description of B&N Edu’s position on college campuses, "near-monopoly"? "high barriers to entry"?

These guys don’t know what they’re talking about.

Folks, it is well documented that college bookstores are being affected by the same trends as the broader retail industry. Like B&M retailers everywhere, college bookstores are losing sales to their online competitors.

Why do you think Amazon is opening unstores on or near college campuses, and is blanketing college campuses with delivery lockers?

In part its because college mail rooms are being inundated by packages from Amazon, but also because Amazon is picking up sales at the expense of college bookstores.

Some, like the bookstore at Fredonia University, are only seeing a slight drop, while others like the University of Hawaii bookstore reported a decline of several percent YoY.

As I reported in February, the universities that partnered with Amazon also reported a decline in bookstore revenues. Even the NACS (national Association of College Stores) has said that this market peaked in 2010. And that estimate is born out by B&N’s own annual statements.

The retailer reported that revenues for its college bookstore division declined in two of the last 3 fiscal years (2012, 2013, 2014). This, while B&N was signing new contracts to operate additional stores.

Brick and mortar college bookstores are facing stiff competition not just from Amazon but also from retailers like Newegg, which recently announced it was getting aggressive in the college textbook market. And let’s not forget eCampus, which runs 150 virtual bookstores for colleges and high schools, including one for the University of Wisconsin Milwaukee.

And that’s why, folks, when someone tells me that B&N Edu has great prospects, I want to step back and measure the size of their shovel.

While I am not saying that the company is doomed, I do have deep concerns about its prospects. If it successfully shifts more sales online, then it could do well. But if B&N Edu makes the same mistakes as the analysts mentioned above, it will not.

image by Brad Clinesmith

Amazon Opening a Bookstore in Seattle?

Amazon_storefront_Seattle_10.8.15Do you remember all those rumors about Amazon opening a bookstore in Seattle in 2012?

They rumors all turned out to be bogus, but now it looks like life may be imitating art. Shelf Awareness has found credible evidence to suggest that Amazon is going to open a bookstore in an upscale Seattle-area shopping center.

Now Shelf Awareness has learned that work is underway on a newly vacant spot in U-Village formerly occupied by Blue C Sushi, a storefront that, according to city work permits, will be occupied by a retailer named "Ann Bookstore." A source who works at U-Village said that the management has been unusually secretive about the new tenant and that it’s rumored the site will house a bookstore. A management office employee who was asked when the Amazon bookstore would open said only that she didn’t know the date. Also, the most likely local indie candidates to open such a store–University Book Store, Elliott Bay Book Company and Third Place Books–have all said they are not opening a store in U-Village.

In addition, Shelf Awareness has learned that the online retailer has approached booksellers at independent stores in the Seattle area and conducted interviews but didn’t tell much about the jobs it was seeking to fill. (All potential hires signed very restrictive nondisclosure agreements.) Amazon has recruited at least one relatively new bookseller for the "new initiative." The job pays $18 an hour, well above the typical pay scale for an entry-level bookseller. Amazon has also interviewed more experienced booksellers.

Update: New details have emerged on the Seattle store, and a store in Cincinnati.

I’m still looking at the story, but I can add that the location described is at 4601 26th Ave NE in Seattle, Wash. You can find the old location on Google Maps, or you can look on the mall’s map for Blue C Sushi’s new location.

With Blue C Sushi planning to reopen in another part of University Village (according to reports elsewhere and the mall’s map), the old storefront would appear to be empty at this time.

So is this story real?

Well, I can find a business license for Blue C that shows they’re still in that location. And I can find business licenses for a bunch of stores on that street.

But I can’t find a new business license for that particular storefront. And there is no Seattle business license for a company named "Ann Bookstore".

So at this point I don’t have evidence either way.

If this story is true then it would a major change for Amazon. It would be their first true retail operation. Up til now Amazon has only operated pop up stores as well as a handful of unstores on college campuses (see Purdue University for an example). The latter are less stores which sell stuff than they are a variation on UPS stores where Amazon customers can drop off and pickup  their Amazon packages, and get CS issues resolved.

This could be Amazon’s first retail operation, but I doubt it. If this is an Amazon store then the odds are good that this will be another unstore rather than the bookstore that the name suggests.

images by Alvy, Shelf Awareness