Market Overview

Amazon To Put Roots Down With Bookstores?

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Amazon To Put Roots Down With Bookstores?
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E-commerce giant Amazon.com, Inc. (NASDAQ: AMZN) has been blamed for falling sales at brick and mortar competitors like Barnes & Noble, Inc. (NYSE: BKS) and Macy's, Inc. (NYSE: M).

The company's dominance in the retail market was often attributed to the convenience of online shopping, but now it appears that Amazon is going back to basics by opening its own line of brick-and-mortar bookstores across the United States, according to reports in the Wall Street Journal, CNBC and Gizmodo.

Growing Number Of Bookstores

According to Sandeep Mathrani, Chief Executive of General Growth Properties Inc (NYSE: GGP), Amazon is planning to open between 300 and 400 bookstores in malls across the United States. So far, Amazon has only opened one store in Seattle, but Mathrani's remarks suggest that the firm is planning to expand on that concept.

Amazon has already started creating a presence in shopping malls with kiosks in Westfield Corp. shopping centers, but the bookstores would mark a much larger step for the company.

Related Link: Portfolio Manager: Amazon's Q4 Miss Was A "Small Setback And Not A Reason To Dump The Stock"

A Good Strategy?

So far, Amazon itself has made no comment regarding plans to open up bookstores, so it is unclear how Mathrani got the 300–400 store figure. However, many say that the idea of expanding into shopping malls makes sense.

At its Seattle location, Amazon offers a wide variety of books that have been curated using the firm's huge database of customer information. Online and in-store prices are the same, so Amazon is able to retain its competitive price advantage.

Faster Than Shipping

One of the biggest draws to having a brick-and-mortar store is immediacy. While online shopping has gained popularity and shipping choices are getting faster and faster, customers still value being able to enter a store, look at a product and take it home immediately. That's what has kept brick-and-mortar retailers afloat despite the online revolution, and Amazon is eager to gain access to those customers as well.

Editor Update, 9:23 a.m. EST: Gizmodo News published an update to their original story on the issue, "An Amazon spokesperson has told Gizmodo that they don't comment on rumors and speculation. The original source of the report appears to be a small executive for General Growth Properties Inc. [...] Anonymous Amazon sources are somewhat angry about the reports, which come from a non-Amazon CEO, and are calling the entire story (this one included) 'misleading.' Gizmodo has repeatedly asked for on-the-record denials from multiple sources within Amazon and been denied."
Image Credit: Public Domain

Posted-In: e-commerce Gizmodo Snadeep MathraniLong Ideas News Rumors Markets Trading Ideas Best of Benzinga

 

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