It’s been a day or so since the non-story about Amazon allegedly opening 400 bookstores broke, and there have been more blogosphere reactions. I’ll capitalize on the great work Nate Hoffelder did rounding them up here and here, and take a look at the more interesting pieces to see what we can see.
One particularly useful link he dug up was actually in one of the comments, which is the quote from General Growth CEO Sandeep Mathrani in a more complete context:
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.
Mathrani has subsequently issued a remarkably terse “clarification”—a GGP press release states that Mathrani “has indicated that a statement he made concerning Amazon [during the earnings call] was not intended to represent Amazon’s plans.”
Now, granted that I’m just reading the transcript, not listening aloud with pauses and inflections, but it sounds to me like he was trying to lay out out a hypothetical situation and just tripped over his own tongue. Not everyone is great at extemporaneous speaking. To paraphrase the old expression, there’s often many a slip between brain and lip.
It looks as though Mathrani is trying to say that if Amazon were going to go into the bookstore chain business to the tune of 400 stores, it should say that the last mile is all-important—because that’s how all these other on-line outlets opening bricks-and-mortar chains are approaching it. It may be that he heard a rumor about Amazon planning to open that many stores, or it may be that he pulled the number out of thin air. Either way, it looks as though it was meant as a hypothetical, not as an actual statement of Amazon’s plans. But the part about Amazon planning to open 400 bookstores is so easy to take out of context, that’s just what everyone did.
Smashwords CEO Mark Coker feels the terseness of the denial suggests there is more truth behind it than Amazon would like for people to believe, but it seems far more likely to me that Mathrani is so embarrassed by how badly his one misspoken line blew up that he just doesn’t want to risk saying something else that could be misinterpreted.
Unnamed Amazon sources who spoke to Nate and to Gizmodo apparently held that there was no truth to the rumor (and, if Gizmodo can be believed, were rather annoyed about it), but Shelf Awareness (who first broke the story of Amazon’s plans for a Seattle bookstore) and the New York Times cite unnamed sources of their own who say that Amazon does plan to open additional bookstores in the next year or two, but nowhere near 400 at this early date—more like a dozen or so.
Re/Code has a piece looking at the man behind Amazon’s retail outlet plans—Steve Kessel, whose team launched the original Kindle e-reader, according to unnamed sources. Such sources suggest Amazon is looking at other potential retail outlets in addition to bookstores, possibly utilizing other experimental checkout techniques such as automatically charging people for items they take as they leave the store with them. Re/Code also notes that Amazon has job postings for bookstore staff in an as-yet-unannounced Amazon bookstore in Southern California.
Vox suggests that Amazon doesn’t like making extra money, because its mission is to make itself bigger rather than pay out large dividends—so when it comes into extra cash, it has to figure out some way to get rid of it. As such, additional bookstores could be another money soak for Amazon, using up the extra cash it has sitting around after the unexpected success of Amazon Web Services.
The Vox piece suggests that these stores could also be hubs for Amazon’s Prime Now delivery service, but having worked in retail myself I agree with Nate that this is unlikely. Most retail stores these days run on a just-in-time stocking system—their stockrooms have very little room to keep spare inventory; they put it out on the floor as they get it (often causing them to blow important embargo dates). They certainly wouldn’t have the room to store a bunch of stuff to be one-day-delivered—that’s what warehouses are for.
But on the other hand, it seems that Amazon’s one bookstore so far shares something important in common with Prime Now delivery service—both of them are only possible because Amazon does have big warehouses close by. Amazon is headquartered in Seattle where the bookstore is, and they have warehouses in the areas where they are able to offer Prime Now service. So nothing says that Amazon couldn’t pour that money into buying warehouse space at the same time as it buys local storefront space—then it could use that warehouse space to feed both Prime Now and the brick-and-mortar store.
It also seems obvious that the most likely spots for those dozen or so Amazon retail outlets would also be within those Prime Now service areas—it could stock those stores just as easily as it can already supply Prime Now. Speaking as the inhabitant of one of those Prime Now service areas, I certainly hope that’s the case. I have no hope of getting out to Seattle to check out Amazon’s current bookstore, but if one should pop up in Indianapolis, I’d do my best to be there for the grand opening.
Update: I got the name of the mall company wrong in the original version. Corrected it now.