Amazon's bookstores are pulling straight from the playbook of independent booksellers
Since opening its first bookstore in Seattle in November 2015, Amazon has now expanded to two more locations in Portland and San Diego. Just last week, it confirmed the launch of a store in New York City, and is expected to have at least eight stores by the end of this year.
What's driving this change at Amazon, a company who downright rejected the idea for physical stores in a shareholder letter ten years ago?
Amazon is notoriously secretive, but a closer look shows the company may be inspired by a thriving group within the book industry: independent bookstores.
Independent bookstores have been undergoing a renaissance of sorts in recent years, taking advantage of the void left by the shrinking national chain stores.
According to the American Booksellers Association, the number of independent stores has increased 30% since 2009, after seeing 1,000 stores shut down between 2000 and 2007. There are now 2,311 independent bookstores in total, as of 2016. Independent bookstores are also the only channel to increase its share, aside from online stores, Nielsen said in a report last year.
And by following some of what makes independent bookstores so appealing to readers - like smaller store size, neighborhood location, and a personalized curation method - Amazon may be trying to replicate the same type of unique shopping experience, without the human touch.
The store in Seattle, for example, takes up just 7,500 square feet in total, similar to what most independent bookstores are in size. By contrast, an average Barnes & Noble store is 26,000 square feet.
Most of the Amazon bookstores are also launching in community neighborhoods, instead of commercial shopping districts, going after the markets typically owned by independent bookstores. The Seattle store is just 1.5 miles away from an indie store called Third Place Books, while the Chicago store is in the historic Lakeview neighborhood, sitting within a mile of two independent bookstores.
Amazon's bookstores are taking a completely different curation process too, guiding people toward books with high ratings and pairing up each book with Amazon user reviews.
On top of that, the sales of physical books have steadily increased over the past four years at the expense of e-books, which shrunk 13% in year-over-year sales last year, according to Nielsen, meaning there's growing demand for paper books.
Major competition
Independent bookstore owners are already starting to feel threatened by Amazon's bookstores. In Chicago, for example, 15 bookstore owners have joined each other for an initiative to remind their respective communities of the importance of local bookstores.
The threat is even felt in San Francisco, where Amazon hasn't revealed plans to open a bookstore yet.
Michael Stuppin, the owner of Alexander Books Co., a 26-year-old bookstore in downtown San Francisco, says an Amazon store in the city would take a direct hit on his business.
"Amazon could afford to pay for a better location. There's an opportunity for them," Stuppin told us.
Still, Stuppin is hoping there will be a market for both, given the absence of national retail chains, and the different value his store brings, like the warmth and familiarity only local shops can offer. For what it's worth, the NY Times described Amazon's Seattle bookstore as "corporate" and a "nice Barnes & Noble" store.
But it's hard not to feel the pressure if you're an independent bookstore owner. Amazon has a history of trying to take business from independent bookstores, as it's done to large big box retailers.
"Amazon's model has always been to put the other guys out of business, right? It's just competition," Stuppin said.