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Amazon (AMZN) to Expand Brick & Mortar Bookstore Concept

Zacks Equity Research

Amazon.com, Inc. AMZN is reportedly planning to open its fourth brick-and-mortar bookstore in Chicago. According to the Chicago Tribune, the new bookstore in the Lake View region will open its doors next year.

Amazon Bookstores

Amazon opened its first brick-and-mortar bookstore known as Amazon Books last year at Seattle’s University Village shopping center. Besides stocking more than 5000 books at a time, it serves as a platform to increase customer loyalty to the Amazon brand.

The second store was opened recently in San Diego, CA. The third one is planned for Portland, home to a large community of booksellers.

What Sets it Apart from Competitors?

Amazon offers some unique features at its book stores that set it apart from others. Books are sorted on the basis of Amazon.com customer ratings, pre-orders, and sales are displayed with their front covers containing titles. The stores also display customer reviews and sales figures with the books.

The prices are the same as on Amazon.com but the books don’t have a price tag. This is Amazon’s way of making customers download the Amazon app so that they can have a look at the prices.

Books can be bought on spot or scheduled for a future delivery that Amazon takes care of just like online.  The stores also allow customers to try out the new Kindle e-reader, Echo speakers and a range of Fire tablets.

AMAZON.COM INC Price

AMAZON.COM INC Price | AMAZON.COM INC Quote

Bezos Seems to Keep his Promises

This year in February, The Wall Street Journal had indicated Amazon’s plans to open 300 to 400 bookstores across the country. However, Amazon declined to comment on the report at that time.

Later, on May 17, at Amazon’s annual shareholders’ meeting, Jeff Bezos said that, “We’re definitely going to open additional stores.” So the speculations are slowly turning out to be true.

Why Go the Brick and Mortar Way?

Though Amazon’s strategy behind going the brick and mortar way is not clear, we believe that this could make for a more personalized experience that some book readers actually prefer.

Physical stores might also help Amazon with showrooming. Its stores will have friendly sales people helping customers in product search, installation and use of Amazon apps and even return of merchandise.

Amazon might go the brick and mortar way with other merchandise as well, targeting the considerably large customer base that still prefers to shop at physical stores. We note that every industry matures and falls. Amazon seems to be gearing up well in advance should online retail ever bottom out.

Zacks Rank and Stocks to Consider

At present, Amazon carries a Zacks Rank #3 (Hold). Some better-ranked stocks include PetMed Express, Inc. PETS, Stamps.com Inc. STMP and Autobytel Inc. ABTL, each sporting a Zacks Rank #1 (Strong Buy).

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PETMED EXPRESS (PETS): Free Stock Analysis Report
 
AMAZON.COM INC (AMZN): Free Stock Analysis Report
 
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