Publishers Weekly, October 2014

Publishers React to Amazon’s Pop-Up Stores

Publishers Weekly, Oct 17, 2014

by Anisse Gross

Recent news that Amazon is getting into bricks and mortar retail, with plans for two California pop-up stores, has gotten people in publishing talking. That Amazon wants physical stores to sell more of its hardware is, according to a number of publishing professionals, no surprise.

Amazon’s California pop-up stores are set to open before the holidays in San Francisco (in the Westfield San Francisco Centre) and Sacramento (in the Westfield Galleria at Roseville). Athough the Wall Street Journal reported that Amazon is also planning to open a seasonal store in midtown Manhattan, Kinley Pearsall, a public relations manager for Amazon, said the company has “made no announcements about a location in Manhattan.”

Toeing the waters of brick and mortar retail is something Amazon has been doing in recent years, experimenting with vending machines, kiosks, and lockers. Some wonder if these pop-up stores signify a larger push for permanent physical retail presence, similar to the likes of Apple’s retail stores.

Pearsall said the California pop-up locations will allow customers to “try out” Amazon’s new devices. “While customers can already see our products online and at retailers like Best Buy and Staples, we wanted to provide another option to try out our full line-up leading into the holidays.” Kinley also confirmed that the stores will not feature books, only Amazon devices, and accessories for those devices.

Dominique Raccah, publisher and CEO of Sourcebooks, said she views Amazon’s move as “as a test of the Apple store concept.” Coincidentally, Amazon’s slated San Francisco kiosk is down the street from Apple’s San Francisco flagship store, a championed model of the retail experience, where users can test and handle devices.

Raccah thinks Amazon’s push into physical retail is all about drawing consumers to its hardware. “Amazon uses its devices as ecosystems to lock in users,” she explained. “So the more devices they sell, the more of everything else they sell as well (books, TV shows, products, etc). In my mind, this is an Apple store play for Amazon. They’ll learn some things about what makes for a successful device sales in-person experience. You should also recall that unlike Apple, Amazon devices are actually not as available through other retailers. So this will provide Amazon with a test during peak holiday sales, without much expense or ongoing commitment.”

Steven Zacharius, president and CEO of Kensington, said he thinks the move is tied to the fact that Amazon’s device sales have slowed down. “People don’t have to replace their tablets or e-readers every year,” Zacharius said. “So I assume Amazon feels the need to let people see and touch [their devices], to show them what they’re all about.”

Literary Agent Ted Weinstein says he’s not surprised that the stores will be focusing more on devices than books. “Compare the sales trend lines for Apple stores vs. bookstores. The margin difference per unit of stocking space between makes it pretty obvious which category makes more sense to sell, especially in limited-term, pop-up format.”

Amazon’s expansion into physical retail seemed less of a concern for those interviewed by PW, than an interesting gambit by the company that merits watching.

“I don’t have any issues with Amazon trying to sell their devices in a brick-and-mortar type environment,” Zacharius explained. “Barnes and Noble has been doing this with the Nook for a long time now. I think that it’s going to be an interesting venture to see how Amazon transforms its business from a warehouse and online retailer to a brick-and-mortar type business. It’s quite different than selling online.”

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