Amazon's NYC bookstore is not really for selling books

Amazon opened its first New York bookstore this week, its seventh physical bookstore in the US, in the upscale Time Warner Center shops at Columbus Circle in Manhattan.

Opening up physical bookstores may look like a strange move for the company accused of killing off physical bookstores. But the stores serve a number of strategic purposes for Amazon, and selling books may be the least of them.

Most media discussion of the store has centered around the method of display: books are shelved with the covers facing out (as opposed to the spines) and with a user review from Amazon.com below every book, plus the number of total reviews the book has and its average score. Only books with 4 stars or higher can earn a spot in the stores, with the exception of a few new releases.

Most of the sections are organized based on data from Amazon.com (Highly Rated: 4.8 Stars & Above; Frequently Wished-For on Amazon.com; If You Like, You’ll Love) or data from Kindle (Page Turners: Books Kindle Readers Finish in 3 Days or Less).

A display shelf in Amazon’s bookstore (Daniel Roberts)
A display shelf in Amazon’s bookstore (Daniel Roberts)

All of this has led to the criticism you’d expect the book world to have when the big bad guy moves into town: Quartz wrote that the store “sucks the joy out of buying books.”

But the other striking characteristic of the store is a large section for products that aren’t books: Amazon hardware devices like the Echo and Echo Dot.

That’s no afterthought. Think of Amazon’s physical bookstores as a proving ground for its many other, larger brick-and-mortar plans.

A test for future Amazon stores

“This is a way for them to figure out how to do physical stores,” says Spencer Millerberg, CEO of e-commerce researcher One Click Retail. “Amazon started [in 1994] in physical media like books and CDs that were easy to stock and sell cheap and didn’t expire. Now they’re doing consumables, groceries, clothing, and what they’re trying to do there is really, really hard. They don’t understand the minutia and mistakes they’ll make in the meantime. This store is just a beachhead for Amazon in order to get into consumables, clothing, and electronics, all in physical retail.”

Indeed, Amazon had planned to open its first Amazon Go, a cashier-less convenience store, in Seattle in early 2017, but in March it delayed the opening. That may signal it hasn’t quite figured out the kinks of brick-and-mortar yet.

The bookstores could be useful for some of Amazon’s other business endeavors, too. “They’re never going to tell you, but you can sense that you might need a physical location for drones to do delivery,” says Millerberg. “Having these stores act as distribution hubs is not a bad way to go, or having these function as a physical place to touch and smell their devices is not a bad way to go.”