Amazon.com, Inc. (AMZN), today is many things: an online retailer, a streaming video service, a streaming music service and an industry-leading cloud computing company. It’s even considering setting up an entire delivery network.
But AMZN made its bread and butter in the early years as an online bookseller — one that ended up sending Borders into bankruptcy and bringing Barnes & Noble, Inc. (BKS) awfully close to irrelevance.
Now, Amazon is launching its very own brick-and-mortar bookstore, the first in company history.
And, believe it or not, it could do wonders for the AMZN stock price (not that it needs much help currently) if it’s successful.
Amazon Books (and Devices)
Using the modern-day parlance of the tech industry, AMZN paints its new Seattle location (dubbed Amazon Books) as a disruptor of the traditional bookstore. It will do things differently, you see.
Instead of putting books spine-out to fit in more titles, they’ll be assembled face-out, with Amazon.com reviews beneath them as well as customer ratings. Pre-orders, sales, popularity on Goodreads and the good taste of Amazon’s book experts will also be considered in the curation process.
In so many words, Amazon is creating a “smart” bookstore. So how is this a potential boon to AMZN stock? Especially given the fact that Alphabet Inc (GOOG, GOOGL) is simultaneously ditching its own plans for a physical store in New York City.
The real potential in Amazon Books actually has nothing to do with books at all. Per a press release from the company yesterday:
“At Amazon Books, you can also test drive Amazon’s devices. Products across our Kindle, Echo, Fire TV, and Fire Tablet series are available for you to explore, and Amazon device experts will be on hand to answer questions and to show the products in action.”
Translation: AMZN is now pushing its devices in the flesh and bone, just as Apple Inc. (AAPL) does in its famously bustling stores. This makes a lot of sense: If Amazon wants to keep gaining ground in devices, it’ll need every sales channel it can get.
Another great thing about Amazon’s physical stores is the price point; the process of “showrooming,” where customers test a physical product in-store and then buy it online elsewhere, is completely circumvented with Amazon Books.
That’s because online prices and in-store prices are identical. AMZN doesn’t care where you buy its products, so long as you buy them.
If AMZN can use these physical locations to hype up future product launches and wrap lines around the block as Apple currently does, this whole brick-and-mortar thing just might stick after all, 20 years later.
As of this writing, John Divine was long AMZN stock and AAPL stock. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.
