Amazon Books: A Closer Look at a New Development in Amazon’s Business Model
On March 6, Amazon opened the doors to another location of its Amazon Books stores in Austin, Texas, one of 15 such stores in existence. It is located in the Domain, an upscale shopping center where unmistakably Texan roots are infused with the style of California tech. While the opening of an Amazon Books is nothing new (the first such store debuted in Seattle back in November of 2015), I decided to check up on the new location to see what continues to draw people to them. And while I don’t happen to have a crystal ball on hand, I hoped to see what the store hints at for the future of Amazon.
Honestly, I felt like a kid at a candy store. The first thing that caught my eye was not any book but Amazon’s impressive assortment of electronic products arranged at the store’s front. The newest Kindle reading tablets and Echo smart speakers were on display, not to mention a large wall stocked with accessories and add-ons like smart thermostats and lightbulbs. I couldn’t help but be reminded of a Microsoft or Apple store as employees encouraged visitors to try out the devices. I even got to enjoy surprised looks from my grandparents when I used the voice command to turn off and on, then brighten, one of the store lights (that alone made the trip worthwhile for me!).
As I began to take a closer look at the products, I witnessed firsthand what makes the Amazon Books locations so unique. For example, there were virtually no price tags on any items- just barcodes. Instead of viewing the price within the item description, customers had the option of taking the item to a nearby scanner or of using their smartphone with the Amazon Shopping app to scan the barcode. And don’t worry, if any of this seems complicated, store employees were more than happy to help me download and navigate the app.
The price description itself was interesting as it was split into two values, one for Prime members and one for everyone else. Prime membership is an Amazon subscription-based service in which members pay a flat yearly fee in exchange for various perks, such as discounted or free shipping and access to content like movies and music. It turns out that Prime membership is a very important part of Amazon’s business model, given that Prime members tend to spend considerably more than non-members. This was reflected in how the pricing of books and generally all non-Amazon made products was subject to a generous discount for Prime members. It seems that the company has utilized the store as yet another way to promote its Prime services, even though it has promoted this service for many years now and typically through advertisements and special events like Prime Day.
Of course, tech and membership perks aside, what would a bookstore be without the books? Once again, Amazon delivers an impressive selection of bestsellers, trending novels, and even travel books for the local area. I was especially struck by the children’s section’s painting of people enjoying the beautiful Texas landscape. Even in a children’s painting, Amazon products had a presence: among the book readers in the painting, someone was reading off a device that was undoubtedly a Kindle, just like the Kindles prominently featured throughout the stores with signs encouraging readers to try out the eBook version of a novel rather than peruse the paper version at its side. There were toys, games, and even kitchen appliances like blenders in the store, but the focus was clearly on the devices and books.
Now that I have covered the products, it is time to make it to the last stop on the journey through the store: checkout. The area was marked by a table with a set of tablets, where customers would bring their purchases to be scanned by an employee. Up until this point, the process seemed rather normal, but then the cashier asked if I had a Prime membership (I did), which gave me the opportunity to take out a credit card associated with the account. Even more conveniently, I was able to pull up the app I mentioned earlier and pay with it. After a simple scan of a code on the phone, I was the proud owner of a brand new book. I even received an Amazon bag that prominently advertised Audible, another Amazon subscription service that provides audiobooks.
But what does all this mean for Amazon going forward? It means that the company will continue pushing for Prime membership in any way it can. Looking at it from this perspective of Amazon’s most popular service, Amazon Books represents yet another reason to buy into the service, beyond the already existing reasons of free shipping, streaming content, etc.
Amazon Books also serves as an important staging ground for Amazon products, especially those electronics I talked about.
Perhaps all of these things mean that eventually Amazon Go (a new grocery store being tested with automatic checkout) and Whole Foods (which Amazon just purchased) will be transformed into the ultimate manifestations of Amazon services, where every aisle has an advertisement for some additional product or service. It seems to me that Amazon will only continue to push its integration into our lives. Who knows? Maybe in a few years we will see Amazon home stores where you can go in and buy Amazon brand smart speakers, locks, lights, and home surveillance in a store they market as “just” a home goods store. At the very least, I hope you will agree with me that Amazon Books is far from being “just” a bookstore. No- in fact, they represent just the tip of the iceberg when it comes to Amazon’s plans.