Amazon CEO Announces More Brick-and-Mortar Bookstores

Amazon.com, Inc.’s (NASDAQ:AMZN) CEO Jeff Bezos confirmed on Tuesday that the company will launch more brick-and-mortar bookstores.

“We’re definitely going to open additional stores,” Bezos said at Amazon’s annual shareholders’ meeting.

The announcement indicates that Amazon is preparing to strengthen its foothold in brick-and-mortar retailing, likely enabling it to learn more about its customers and also helping distribution.

Amazon opened its first brick-and-mortar bookstore known as Amazon Books last year at Seattle’s University Village shopping center. Besides stocking 5000 to 6000 books at a time, it serves as a platform to increase customer’s loyalty to the Amazon brand. The store displays sales figures and customer reviews with the books. It also allows customers to try out the new Kindle e-reader.

The second store is expected to open this summer at San Diego’s Westfield UTC mall. Prices will be the same as on Amazon.com.

Earlier this year, the Wall Street Journal indicated Amazon’s plans to open 300 to 400 bookstores across the country. However, Amazon declined to comment on the report at that time. The speculation turns out to be true following the announcement.

Though Amazon’s strategy behind this new move is not clear, we believe that this could make for a more personalized experience that some book readers actually prefer.

We already know Amazon as the "everything store" and it appears that the company is now trying to be the "everywhere store" as well.

Why Go Offline?

As far as books are concerned, we know that Amazon is itself a major book publisher and offers services such as editing, formatting, design and distribution of paperback and hardcover books.

Physical stores might also help Amazon with showrooming because they will have friendly sales people to help customers find the products they want, install and use Amazon apps and even return merchandise.

Amazon might go the brick and mortar way with other merchandise, 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.

Currently, Amazon is a Zacks Rank #3 (Hold) stock.

Better-ranked stocks in the broader technology space include Amkor Technology, Inc. (NASDAQ:AMKR) , Netgear Inc. (NASDAQ:NTGR) and TiVo Inc. (NASDAQ:TIVO) , each sporting a Zacks Rank #1 (Strong Buy).