The Seattle Times, and many other outlets, are reporting that Amazon is opening the company’s first-ever brick-and-mortar bookstore in Seattle. But why? There are a few reasons, some fairly certain, others not so much.
The main reason, if you believe the news, is that they are using the Seattle location to test the validity of their market data in real-world conditions. This is not mere speculation; they have proudly announced that the stores will utilize geo-centric purchasing data from Amazon.com to drive inventory stocking in the Seattle location.
The second reason is purely speculative. And it’s not solely because of the company’s limitless thirst for market domination, although that's very likely a factor. No, it’s probably because Amazon, in the past few years, has come under increasing scrutiny from regulators worldwide as well as the public they claim to serve. Horror stories of the company's business methods are starting to leave a foul taste in the mouths of more and more consumers. Should the taint of general disapproval really set in, Amazon then becomes nothing more than a more-efficient Wal-Mart, loathed but tolerated by millions of people. I guarantee you that is not what Jeff Bezos wants.
By rolling out "friendly", familiar-looking physical bookstore near malls, the Amazon name becomes a familiar—and perpetual—sight. When it comes to retail, familiarity hopefully does not breed contempt. Amazon is probably counting on that to reclaim some of the ground lost by defunct brands like Borders.
Oh, and if you think books are the only thing that Amazon will be selling in physical locations, think again. If the company succeeds with their brick-and-mortar bookstore concept, there’s a very good chance that Amazon “superstores” will begin popping up before you know it, selling everything from electronics to groceries.
Wal-Mart and Costco should be very, very afraid.