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Business Insider has an analysis of Amazon’s quarterly sales-and-profits report from last week in which it points out that the company broke out “physical stores” as a category for the first time, and conceded that the “lion’s share of the revenue in that category - about $1.3 billion - is from Whole Foods.”

Which means, essentially, that “there's not a whole lot of revenue being generated” by the company’s Amazon Books stores.

But, as with all things Amazon, it may not be quite that simple.

There are two reasons for this, Business Insider argues.

One is that there simply aren’t that many of them - a dozen spread around the country, with three more scheduled to open.

In addition, there’s no compelling reason to buy a book at a bricks-and-mortar Amazon store.

Except … it may not matter.

Amazon Books actually may be more important as a way to demonstrate the company’s proprietary consumer-facing technology, such as Kindles and the various Alexa-powered voice-activated devices like the Echo.

In addition, the stores may serve another important purpose - as yet another benefit to people who are members of Amazon Prime. Books sold there are cheaper for Prime members, and, as Business Insider points out, “Amazon is willing to invest heavily in attracting and maintaining Prime members because they tend to spend more on over the course of a year - nearly double what non-Prime members spend. They're also more loyal overall than non-Prime members, shopping twice as often. There's also evidence that suggests Prime members spend more on Amazon the longer they stay Prime members.”
KC's View:
I think the observation about the stores being as Prime benefit has some merit, but I also think that more importantly, they serve as a place to display and explain technology, as well as a place where they can test various strategies and tactics in a bricks-and-mortar environment that could find their way into other retail environments.