The Future of the Physical Bookstore: Amazon vs. The Independents

“Where there is confusion, there is profit,” goes an old adage of the greedy. But might it work the other way around? In publishing, few predicted the renewed vigor of the printed book, and still fewer told of the resurgence of the bookstore — especially the independent bookstore. But now that the profitability of physical books and the stores that sell them is something of an ongoing fact, their future orientation is murkier than ever.

To begin with: the good news. Bookstores’ sales in the United States now appear to be growing at an increasing rate, as numbers from January indicate a level of growth that would outpace even last year’s total bookstore sales, which were the best in recent history. According to estimates released by the US Census Bureau, January bookstore sales grew at 3.8%. Last year, the strongest since 2007, bookstore sales grew by 2.5% percent, totaling $11.17 billion.

The reason for such a sharp rise in bookstore sales isn’t entirely apparent, but analysts usually chalk it up to a mix of community awareness, event savvy, and the resurgence of a zeal for print books over and above ebooks (the sales of which are increasing at a decreasing rate). Sales in 2015 were also pushed largely by women writers, with Harper Lee’s Go Set a Watchman, E.L. James’ Grey, and Paula Hawkins’ Girl on a Train taking the top spots, respectively.

According to Jenn Risko of Shelf Awareness, in an interview with GeekWire, retail sales of physical books alone accounted for more than $800 million in 2015. Given the revenue capacity of the physical book sales, it’s no big surprise to see new players enter the fray.

But Amazon? The so-called “everything store,” which is another way of describing a profit-ignoring behemoth that gentrifies the physical with the digital, has curiously launched its own chain of physical bookstores. (Point of fact: Amazon is the reason we distinguish between digital and physical bookstores at all.) The first of these brick-and-mortar storefronts is now open at the University Village mall in Seattle; the second is slated to open near the campus of UCSD in Southern California later this year.

Given Amazon’s basic opaqueness with regard to business practices, it has been left up to the publishing community to surmise the reason for this move from the digital to the physical. As Risko explains in the interview, many at first thought that Amazon planned to use the stores to collect data on the purchasing habits of a demographic that prefers print books. Now, however, it’s clear that Amazon wants a slice of an expanding pie:

Some of us in the industry at first thought maybe it’s data collection and that they’ll learn things about how people buy books. But most of us now just believe that it’s about retail sales. The retail sales of physical books in physical bookstores last year was over $800 million. That’s a pretty nice scrap in the corner that Amazon will lovingly go after.

It’s also true that Amazon, now a publisher of books (along with being a monopsonist buyer), has been blockaded from other physical and digital stores because it has long engaged in a war of attrition with retailers and publishers. “It’s virtually impossible for [Amazon] to get [their books] on any shelves whatsoever,” Risko explains. “Both the independent bookstores and Barnes & Noble bound together and said, ‘We will not carry the Amazon-published books.’”

But what is at stake here is not just the familiar battle between Amazon and other players in broader publishing. There is also a competing ethic at play. If local, independent bookstores especially rely on a community model — booksellers know, in other words, the sorts of books that appeal to their local buyers — Amazon’s stores would have to find another way to compete. Instead of amassing data from the purchases at their physical stores, they’re likely planning to take advantage of the inverse: they’ll use algorithmic data to determine which books are “necessary” for given localities. Even if an Amazon bookstore houses a mere 5,000 books, for example, they can do so because this booklist will be algorithmically tuned to local buyers.

Of course, Amazon bookstores will be hard-pressed to emulate the warmth and familiarity of the independent bookstore, or the growing prowess of the independent bookseller, whose dust jacket blurbs have come to compete with (and even replace) recommendations by authors and critics. But it won’t be for lack of trying. Last week, when the New York Times sent a reporter to Amazon’s first storefront in Seattle, they noted its distinctly “corporate” vibe. They also noticed at least one case where it struck a family-friendly tone: when they turned up a cover-first display of a novel by Mackenzie Bezos, wife of the Amazon founder, it came with the endorsement of an important player in the Amazon community. In his blurb of the book, at least, Jeff Bezos admitted to a conflict of interest.