Interview: Book industry insider analyzes Amazon’s move into physical bookstores

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Jenn Risko, co-founder and publisher of the Shelf Awareness newsletters.

Jenn Risko has a unique perspective on Amazon’s move into physical bookstores, as the co-founder and publisher of the Shelf Awareness book industry newsletters. The publication originally broke the news about Amazon’s first-ever bookstore, which opened last fall in Seattle’s University Village.

Just this past week, Amazon confirmed that it’s expanding its retail presence beyond Seattle, with a second bookstore in San Diego, Calif., which is likely to be followed by more locations around the country.

But Risko, who worked previously with book publishers including Rand McNally, Insiders’ Guides and National Academies Press, says Amazon’s bookstore can’t compete with traditional community bookstores in space or in offerings. Using algorithms to determine what books people should read will never replace bookstore owners who know their customers personally and who are truly passionate about books, she says.

Hear more about Amazon and the evolving world of books from literary industry insider Jenn Risko on this week’s GeekWire radio show and podcast, starting in the second segment, at 8:20 in the audio player below. Also continue reading for an edited transcript of Risko’s conversation with GeekWire’s Todd Bishop.

Todd Bishop: What is Shelf Awareness, for people out there who don’t know?

Jenn Risko: Shelf Awareness was started about 11 years ago as a book industry facing e-newsletter to the trade. It’s read by about 38,000 booksellers, librarians and folks that work in publishing.

Todd Bishop: You also have a separate newsletter for book readers, as well.

Jenn Risko: We do. We started a consumer-facing publication called Shelf Awareness for Readers about five years ago, and we actually produced the content for a lot of local stores such as Elliott Bay, University Book Store (and many others around the country.

Todd Bishop: Let’s talk about Amazon’s bookstore. Shelf Awareness broke that story originally. So, you’ve been there. As someone who’s been in the book industry for so long, who works very closely with booksellers and knows the trade, what do you think of Amazon’s physical bookstore?

Jenn Risko: Well, we were all quite surprised by it. We began to follow the story just because we always thought that if they were going to open a store anywhere, it would be in Seattle. The day that it opened, we were all standing outside — watched it open, saw the lights come on and everything else. You go inside and it’s a very small store. I think it’s really interesting that when Jeff started Amazon 20 years ago, his slogan was, “The Earth’s biggest bookstore,” and he’s now become Seattle’s smallest independent retail location. Because think about it — 5,000 feet is maybe a tenth of the size of Elliott Bay and about a fifth of the size of the University Book Store here in Seattle.

Todd Bishop: Yeah. Jeff Bezos’ home is no doubt much larger than his bookstore.

Jenn Risko: Yeah. And, actually, funny story: Jeff used to hang out in the basement of Elliott Bay Book Store and write his business plans down there.

Todd Bishop: I know we were going to talk about this later, but you actually have some shared history with Jeff Bezos.

Jenn Risko: I do.

Amazon CEO Jeff Bezos
Amazon CEO Jeff Bezos

Todd Bishop: Dating back, prior to the founding of Amazon. Tell us that story.

Jenn Risko: I think it was about 21 years ago. The main association of independent bookstores, called the American Booksellers Association, otherwise known as the ABA, used to put on educational programs for people who were interested in starting a bookstore. I sat next to Jeff Bezos. He stood up and told an entire room full of people that he was going to start an Internet bookstore. We all kind of looked around and went, “Yeah, okay. Great.” We had no idea what we were in store for.

Todd Bishop: The Amazon Books store in University Village — it is small. In fact, I remember one of the reviews was that it did not pass the “butt test.” In other words, if you were bending over for a book and somebody was behind you, you would basically bump your butt into them.

Jenn Risko: Oh yeah. For sure.

Todd Bishop: What do people in the industry think of the actual space and the way Amazon is going about this?

Jenn Risko: Both people in the industry, as well as just people that I’ve spoken to that have been in the store, find it to be very small and confining. There are some seats that are next to the devices, and, actually, next to the magazines, which is kind of interesting.


Todd Bishop: Why do you think Amazon opened a bookstore? Because obviously Seattle’s not going to be the only one. We just had the news about San Diego. Why do you think the company is doing this?

Jenn Risko: Why are they doing it? That’s a good question. 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.

Todd Bishop: So this could just be about pure sales, boosting their business. Although, they would need more than one or two stores, obviously, to make any kind of dent in their overall business.

Jenn Risko: Sure. And they’ll learn things. I do think that there’s just — forgive me for a moment — but I do think that there’s just a tiny, wee bit of arrogance. If you think about the fact that Amazon publishes lots of books, it’s virtually impossible for them to get them on any shelves whatsoever. Both the independent bookstores and Barnes & Noble bound together and said, “We will not carry the Amazon-published books.” We always like to joke at Shelf Awareness that this is one way for them to finally get their publications onto some shelves.


I actually think the store itself has an interesting feel. It is small. The weird thing that I’ve talked to a lot of people in the industry about is that it’s a small store, but then again, it’s only got about 5,000 titles. That is a tiny percentage of what most independent booksellers would carry. Instead of anything being spine out, it’s all cover forward, and stocked 10 deep. That experience that you would get in an independent bookstore or even a Barnes & Noble, of going through the racks and the stacks and trying to find that secret hidden gem, that experience does not exist there.

What I felt, and obviously I’m a bit biased, but what I felt when I was in that store was, “Here’s your 5,000 titles, the only titles that you need. They’re stocked 10 deep, and our algorithms know exactly what books you need.”

Todd Bishop: Is that good or bad for readers in the long run, this whole idea of Amazon and computers making the choices of what you should read?

Jenn Risko: You’re basically crowd-sourcing where you spend your time reading. The particularly scary part is that there’s a number of segments of Amazon’s website and algorithms that are very clearly pay-to-play. So when people like Macmillan Publishing and Hachette just last summer weren’t giving Amazon the co-op and placement funds that they demanded, their books were no longer available on the site.

How does that make you feel when you’re looking for a book? Oh, somebody didn’t pay that co-op bill right away? Boom. Shut off. That’s some of what’s making decisions for you. It is in print that Amazon says, “As soon as someone won’t agree to our terms, we just start screwing with their algorithms so that their books do not show up.”

Todd Bishop: Should independent booksellers be afraid of what Amazon is doing? If you look at what Amazon has done online, they’ve already completely upended big portions of the industry. Now they’re going into the ruins of what they’ve done and trying to build up their new infrastructure.

Jenn Risko: They’re hiking into Rome with everything burning around them saying, “That looks good, too.”

Todd Bishop: I can tell that you work in the literary industry. You’re much better at that than I am. Should they be afraid?

Jenn Risko: Should they be afraid? It’s certainly something to keep an eye on. I think that it does make a lot of people nervous. The difference is this, though: if they stick to this model, is that a community bookstore with only 5,000 titles, which again, is a tiny percentage of what a regular independent bookstore would carry? I think that the independent bookstore experience offers something that Amazon can’t possibly replicate. I really do.

Todd Bishop: What do independent bookstores offer? This may be a dumb question. I go into independent bookstores, so I have a sense for the answer to this, but what do they offer that somebody like Amazon could not?

Jenn Risko: One of the big things, I would say, is events. I think that a lot of local booksellers are keeping their eye on this store to see what’s going on with it. I could unhappily imagine Amazon using their weight to demand that an author appear at their store.

Todd Bishop: And not at other stores, perhaps.

Jenn Risko: Exactly. I think John Grisham only comes here once every three years, and Amazon’s been well-known to use their muscle to make demands. That’s something that concerns all of us. But again, listen: the independent bookstores like Elliott and Third Place and University Book Store who have been here for many years, the way that they sell books is by knowing their customers. It is not by algorithms.

Todd Bishop: There was the report from one of the shopping mall executives that Amazon might be opening 300 to 400 stores in a relatively short term over the next few years. Do you buy that?

Jenn Risko: No. I don’t buy that. I don’t know for sure, but we have sources who say that it’s more like 12 to 15. The guy who said that owns just a crap-ton, forgive me, of mall space. So what he was saying to his investors was, “I have a new revenue stream showing up in my mall stores, which is all of these online retailers like Bonobo Shirt Company and Amazon, who want to start opening all these physical locations.” That dude benefits greatly from saying that, don’t you think?

Todd Bishop: Absolutely.

Jenn Risko: It was really shocking to see — the Wall Street Journal, I think, was the first one to jump on it — it was shocking to see, “Amazon to Open 400 Stores.”

Todd Bishop: The back channel stuff that we were getting on that was guidance to be very skeptical of what he said.

Jenn Risko: Yes. I mean, listen: we already know that there’s another 8 to 10 planned Amazon stores. They are by a lot of their distribution centers. They are by universities. This model will continue, but I don’t think it will continue to the levels of three or four hundred.

Todd Bishop: Big picture, where is the bookselling industry going? Where are indie bookstores right now? And what do you see for them over the next five to ten years?

Jenn Risko: Bookstores have had quite a resurgence lately — independent bookstores — because it’s an experience that you can’t replicate online. I think that the importance of shopping locally and supporting independent stores, whether it be your farmer’s market or your independent bookstore, has really grown tremendously. Bookstores are doing very well.

They went through a really tough time and now I think it’s sort of Darwinian. The ones that are still out there are doing some really interesting things. Some of them have summer camps and cooking classes and travel trips — literary travel trips. Like, “Let’s go see where All the Light We Cannot See took place in Normandy, France. Let’s go and do a literary journey together.” You have to be really passionate about what you do to be able to do such things, and our indies are that, of course.

Follow Jenn Risko on Twitter and register for the Shelf Awareness newsletters here.


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