Amazon to open more bookstores in 2018

Amazon will be opening two new bookstores, in Washington, D.C. and Austin, Texas, in 2018, according to the company. The new outlets will bring the total of Amazon Books locations to 15 after the two remaining stores scheduled for 2017 openings (in Los Angeles, California and Walnut Creek, California) are completed.

Since Amazon’s first brick-and-mortar bookstore opening in 2015 (in Seattle, Washington), the company has picked up its expansion pace, suggesting that there are enough Amazon fans heading to their physical stores to make the investments worth it. Of course, places like Seattle, San Diego, Chicago, and New York seem to be fairly obvious choices for an online bookseller’s foray into the physical space due to either novelty or easy access, both of which would serve as draws for the demographics of those cities. But still, Amazon is known in certain circles as the bookstore killer—what is it doing building a presence in a way that seems counter to its all online, all the time business model, and can it really be as successful as opening 15 stores in three years would suggest?

Amazon brings the online space to brick-and-mortar

There are some definite quirks to Amazon’s bookstores. All the titles are front-facing, for instance, altering the traditional feel of browsing book spines with the occasional featured cover. Customers can scan the books with their Amazon app for more information (they can also pay with said app—in fact, the app is very closely integrated with the entire store experience). Prime members get discounts. Featured shelves in the store include “Hot on Amazon Books” as well as the more traditional “New Releases,” and the in-store inventory is largely curated based on reviews and other data points pulled from Amazon online purchasing habits, updated weekly.

It’s an interesting look for a megaretailer known almost exclusively for its online spaces.

Backlash in the bookselling community

It’s not hard to guess why other booksellers are not exactly fans of Amazon Books. Many of the cities where these stores are staking their claims are known for their independent literary scenes, and the struggle of independent bookstores to succeed in the Age of Amazon is a well-known one. Talk about adding insult to injury: to lose business to an online monolith, only to have that monolith then set up shop right next door?

But what do traditional booksellers have that Amazon Books doesn’t? Well, according to some, regular bookstores have a soul that Amazon simply can’t understand. Amazon, they suggest, is merely copy-pasting its online presence into the physical world, and even adding cafés to their stores won’t change that. Only time will tell on that front, but it’s probably fair to say that there will always be people looking for the in-store experience. And if Amazon continues to make life difficult for the competition, what’s to stop them from sweeping in and taking their place “IRL”?


Barnes & Noble makes moves to maintain college customers

Barnes & Noble Booksellers, Barnes and Noble Book Store” by JeepersMedia is licensed under Creative Commons.

On Friday, Bloomberg Dividend Forecast said it expects Barnes & Noble (NYSE: BKS) to cut its payout in half this week, to $0.075. It’s an unsurprising forecast given B&N’s (and let’s be honest, just about everyone else’s) continuing struggle to hold ground against the online purchasing revolution (AKA, that has made nearly all forms of media almost instantly accessible at bargain prices.

B&N Education segment falls short of expectations

At the end of August, stocks of Barnes & Noble Education (NYSE: BNED) fell 17.7% to $5.61 as the company released its Q1 2018 financial results, which included a consolidated net loss of $34.8 million and a reported 2.5% decrease in B&N college comparable store sales.

It would seem that confidence in the company’s abilities to stay relevant in an age of textbook rentals and online resale is dropping, in spite of B&N’s every effort and results: according to the Q1 report, B&N’s education segment reported revenue of $355.7 million, up 48.7% from the previous year’s Q1 numbers (but short of the predicted $406.22 million). In addition, the company wrapped up its acquisition of Student Brands LLC, a leading direct-to-student subscription-based writing skills services business, in August for $58.5 million.

Student Brands is expected to contribute more than $10 million of EBITDA to [B&N Education]’s consolidated results over the next twelve months and significantly expands the company’s opportunity to market the services students need to improve performance in the classroom and to secure jobs after graduation,” said B&N in its Q1 report.

B&N College Booksellers has partnered with Target to promote Target’s college essentials products, aiming to expand customers in B&N’s nearly 800 college stores throughout the U.S., and opened 24 new physical stores in Q1 with total annual sales estimated at $49 million. B&N also acquired MBS Textbook Exchange in February. It seems like B&N is doing all it can to maintain what has been a core customer base (i.e., college students) for the company.

B&N Education 2018 outlook

For all its expansions and acquisitions and partnerships, B&N said in its Q1 report that “for fiscal year 2018, the company expects sales at [B&N College Booksellers] to be relatively flat, while [B&N College Booksellers] comparable store sales are projected to decline in the low- to mid-single digit percentage point range year over year.” Not an optimistic statement for a company that seems to be doing its level best to get involved in every potential education-related avenue available.

“We are all apprentices in a craft where no one ever becomes a master.” —Ernest Hemingway
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