Amazon To Open A Physical Bookstore In Manhattan’s Columbus Circle
Amazon was blamed for the demise of chain bookstores—so why is it opening its own in Manhattan and elsewhere?
After being blamed for single-handedly sinking Borders bookstore and inflicting a gaping wound in the side of Barnes & Noble, Amazon is continuing its march to bricks-and-mortar by announcing the opening of its first NYC bookstore in Manhattan’s Time Warner Center. So what gives?
Amazon was founded on its online book sales, allowing buyers to browse without leaving their homes and order with the push of a button. Why the turn? Surely it’s akin to Spotify or iTunes deciding to open up record stores?
Well, the analogy isn’t such a bad one. Vinyl sales are at their strongest in years and it turns out that physical book sales, like a fifteenth round comeback by Rocky Balboa, are now eclipsing e-books. Amazon’s 4,000 square-foot store is scheduled to open in the spring in the shops at Columbus Circle, where other stores such as Whole Foods and H&M are also tenants.
Related: What Agorafy Can Learn From Amazon
Amazon opened its first physical bookstore in Seattle in 2015. It was followed by two others in San Diego and Portland, Ore. More stores are planned for Chicago and Dedham, Mass and possibly another in Manhattan’s Hudson Yards.
It’s a good time for Amazon to enter Manhattan’s retail market as vacancies are up and rents are down, driven by consumers favoring online purchases. However, as evidenced by Borders (which was once a tenant at Columbus Circle) and Barnes & Noble, banking on physical book sales, in expensive locations is a financially risky move.
There are a number of reasons why Jeff Bezos obviously feels it’s a risk worth taking. Other high profile companies on Amazon’s level—such as Apple and now Google—have high profile Manhattan stores. One theory could be the branding exercise alone makes a physical store worthwhile. Sheer traffic through the door in a prime Manhattan location to enter the world of Amazon books may do more than any ads could.
However, the question arises: If Apple and Google’s high street footprint was in Amazon’s thoughts, why open up a bookstore and not one focused purely on technology? Which leads to the second question. Will Amazon’s bookstore simply sell books or will it up sell all its other products? That in itself could be a risky move—being a hodgepodge for all things Amazon may confuse buyers and dilute the book brand.
If Amazon’s book store is to succeed purely on its own merit, it has to, in many ways, compete with its own online book store. It has to make the experience of actually visiting the store worthwhile. Amazon books can be delivered in a day after ordering online—so why bother dealing with the hassle of the crowds at Columbus Circle? Firstly, like Apple, where people line around the block to get new products, Amazon has to be able to stock the books that people want, as vast and diverse as that may be. Having a warehouse in Midtown Manhattan that can compete with the ones that service their online store clearly isn’t practical. Amazon has to pull it off somehow. It remains to be seen what kinds of deals Amazon will offer its physical customers. Will it manage to do deals with publishers to stock exclusives, have discounts others don’t or offer some kind of interactive/visual experience?
The fit out costs for a Manhattan store don’t come cheap—and neither does the lease. How long Amazon’s lease is for isn’t known—and neither is the kind of depreciation Amazon can offset against costs. In Amazon’s favor is the fact that it makes so much money from its online businesses that physical stores at this point are a risk worth taking. It’s a position all retailers would love to be in.
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