… or are they?
General Growth Properties CEO Sandeep Mathrani spilled the beans Feb. 2 on a big secret that really comes as no surprise: Amazon is going to open more Amazon Books bricks-and-mortar store locations.
Though it’s been rumored in a few ways, shapes and forms this past decade, Mathrani said during his company’s fourth-quarter earnings results that Amazon is looking to open at least 300 Amazon Books stores, but did not set a timetable.
Mathrani said in-store returns is one of the reasons shoppers need to go to bricks-and-mortar stores, and cited Amazon as one of four pure players who are looking to make that omnichannel jump.
“And just case in point, you go to Amazon opening bricks and mortar book stores and their goal is to open as I understand 300 to 400 book stores, and it should sit back and say that the last mile is all important, which is why Bonobos is opening bricks and mortar store and Warby Parker is opening bricks and mortar stores and Birchbox is cutting their overhead to open bricks and mortar stores,” Mathrani said.
But a day later, amidst all the media buzz around Amazon Books, General Growth Properties retracted Mathrani’s statement today in a press release.
“Chief Executive Officer Sandeep Mathrani has indicated that a statement he made concerning Amazon during GGP’s earnings conference call held on February 2, 2016, was not intended to represent Amazon’s plans,” the press release read.
General Growth Properties focuses on exclusively on owning, managing, leasing, and redeveloping high quality retail properties throughout the United States.
In November, Amazon opened its first Amazon Books (pictured above) in University Village, Seattle (which is not a General Growth Properties mall), as a physical extension of Amazon.com. The books in that store are selected based on Amazon.com customer ratings, pre-orders, sales, popularity on Goodreads, and Amazon Books’ curators’ assessments.
Amazon has not confirmed or denied Mathrani’s comment about Amazon Books expanding its footprint. But Kevon Hills, Vice president of Research at StellaService, said that if Mathrani’s quote about Amazon is true, it is a clear move by Amazon to respond to how brick and mortar retailers have successfully invested in technology to leverage their physical stores to close the speed and efficiency gap with Amazon.
Hills said that specifically, this would represent a new opportunity for Amazon to offer free returns, since buy online, return in store has become an area of focus for retailers with physical stores, and have given them an advantage over Amazon.
“Amazon can process refunds within a day or two, but cannot compete with retailers who offer free return shipping by allowing shoppers to drop off a return at their neighborhood store,” Hills said. “Best Buy, Walmart, Target, and other bricks-and-mortar retailers operate at an advantage because they don’t charge shipping when consumers make returns in stores.”
Amazon has been rumored as a bricks-and-mortar player before.
In October 2014, Wall Street Journal reported that Amazon was set to open a physical store during the holiday season at 7 W. 34th Street in Manhattan, across the street from the Empire State Building and down the street from the iconic Macy’s in Herald Square.
However, that Amazon store did not happen, and it seemed like a pipe dream for Amazon to rent out space in October and be ready to roll by Black Friday.
Forbes reported that Amazon will not have a storefront on W. 34th street, and is instead subletting that space out to other retailers.
And last January, as RadioShack was looking to file for bankruptcy, Amazon was seen as a suitor. That rumor included Amazon using those stores to sell its Kindles and, more importantly, be physical places where customers could pick up and return items.
This past fall, Amazon opened pick up locations on several college campuses, staring with Purdue university in Indiana.
“The preference by today’s students for on-line shopping has led to a significant increase in deliveries,” said Marie Witt, Vice President of Business Services at University of Pennsylvania, where a pick up location will open this spring. “When we looked closely at the shipping activity, we discovered that almost half of all packages delivered to Penn student mail rooms were from Amazon.”