We visited Amazon's first neighbourhood bookstore in the US and saw how it could change the industry for good

Amazon Chicago bookstoreDaniel McMahon/Business InsiderAmazon’s new 6,000-square-foot bookstore is located in Chicago’s upscale Lakeview neighbourhood.

In case you missed it, Amazon.com, the world’s largest online bookseller, has been opening brick-and-mortar stores over the past few years, with the newest opening this week in Chicago’s upscale Lakeview neighbourhood.

  • Part bookstore, part electronics store, part coffee shop, the Chicago location is Amazon’s first physical store in the Midwest and the first not in a shopping mall.
  • Amazon is trying to take advantage of millions of Amazon.com customer ratings and reviews and use its big data to offer in-store customers new ways to discover and purchase popular books, both physical and digital.
  • The average book rating is 4.5 out of 5.
  • Although Amazon.com is a digital behemoth, online sales still account for just 8% of all retail sales in the US. A physical store with a human touch could prove to be a smart strategy as it gives customers an opportunity to engage with the brand.

“We started out as an online bookstore 20 years ago — we were founded as a bookstore and we are passionate readers and book lovers,” Jennifer Cast, a vice president at Amazon Books, told Business Insider.

“We also realised we had an opportunity to create a new kind of store and create a different experience in a physical world. Our special sauce is knowing the reading habits and passions of a city through our Amazon.com data.”

Here’s what we saw on our tour of Amazon’s new bookstore, and how the company’s new clicks-and-mortar strategy could influence the way many people buy books.

Amazon says it wants every book in the store to be a great read.

Daniel McMahon/Business Insider

There are 3,800 titles featured at this store, according to Amazon. The books are selected based on Amazon.com customer ratings, preorders, sales, popularity on Goodreads, and the company's curators' assessments.

'In today's world, when you know what you want you can easily go online and buy it,' Cast told Business Insider. 'With a physical store, our mission is to be a great place to discover books.

'We said, OK, in a small space you've got thousands -- not millions -- of books. You would want every book in the store to be a great book, given that we have all this data from Amazon.com customers.

'We also have a very skilled and knowledgeable curator staff. That staff looks at that data -- we call it 'data with heart' because it's data from book-loving customers -- so we started out saying, let's have a quality bar and let's say to be in the store -- unless you're a best-seller -- you need to be 4 stars or higher, or a new book when you're not rated.'

The average rating of books in the store is 4.5 stars.

Daniel McMahon/Business Insider

To stay in the store, a book needs to be 4 stars or higher, as rated by Amazon's millions of customers, Cast said.

'When our customers walk in, we want them to say, 'Oh wow, all these books are highly rated by customers.' We also know that when people come in to look for books, they're usually looking for, or want to discover, one or two books. So thousands of books is enough books to be able to find one or two books you love.'

Under each book is a review card with the Amazon.com customer rating and a review.

Daniel McMahon/Business Insider

'Our insight into what we could do different was, let's take this data, let's give every single book a review, and let's give every single book a rating,' Cast said. 'It's a very different experience then, and you get a very different level of information just at a glance.

'And with the barcode you can scan the cover of the book, so if you really want to dive in and like reading those 50, 100, 200 reviews and you want to read more, you can easily get to that.'

If you want a data-driven way to discover and purchase physical books, especially popular current titles, this could be your store.

Daniel McMahon/Business Insider

'We decided that instead of trying to squish in as many book as we could and have a bunch of spines, we would put the book's cover out and let the books communicate their own essence, which also gives you the space for the review card with the customer rating,' Cast said.

Amazon.com slices and dices its online offerings in a variety of ways, and its physical bookstores take a similar tack.

Daniel McMahon/Business Insider

Amazon doesn't mind 'showrooming.' So if you walk in and browse titles but then go home and buy them online or via your Kindle or Audible, it's still a win for Amazon.

Daniel McMahon/Business Insider

'Oftentimes, people feel uncomfortable 'showrooming' (browsing items in store but buying online),' Cast said. 'You want to buy books for your Kindle but want to discover them in a physical store? Fantastic. You want to ship those books home and you're a Prime member and you don't want to wander around with them? Fine. Want to add them to your wish list for the holidays? That's fine.

'What we've found is, most customers want the immediacy of finding a book they like and buying it online -- fine. We know that people consume books in many different ways today, and we encourage and embrace all of them.'

The Chicago store has sections of books dedicated to popular local interests ...

Daniel McMahon/Business Insider

'We really believe we can create a great mousetrap,' Cast said of the clicks-and-mortar strategy. 'We always say, better bookstores always have their different focuses, and we knew that we had something new to bring to customers.'

... Chicagoans are pretty big on biographies and autobiographies.

Daniel McMahon/Business Insider

'We all have our different 'special sauce,' as we call it,' Cast said. 'Our special sauce is knowing the reading habits and passions of a city through our Amazon.com data. As we learn about the Southport neighbourhood, we will get to know our Southport community.

'It's a different kind of store for us. It's in a neighbourhood. We're going to find out what makes the neighbourhood tick, we're going to listen to their recommendations, learn more about what they buy and don't buy, and you'll see us evolve.

'For us, we're a company of builders, and we're customer-obsessed. We're going to do our best to delight them. We do have a book reading on Saturday, story time for young readers, and we will do lots of stuff in the future.'

So where does an Amazon brick-and-mortar store fit in the universe of existing bookstores, like Barnes & Noble, independent shops, and used-book stores?

Daniel McMahon/Business Insider

'If you look and see what independent bookstores have said about Amazon Books, most of them have said we're all in the same business -- we want more books in the hands of more readers,' Cast told Business Insider.

'And many have also said great bookstores will be successful, and there's room for a lot of different types of bookstores. There is no bookstore in this neighbourhood, so we're excited to bring our special sauce, our data with heart, our great curatorial team focused on bringing great books to people, and we think there is lots of room for great bookstores in the world.

'What we want to do is do what most great bookstore owners want to do -- which is put more books in the hands of young people and book-loving adults. '

A large section of the store is dedicated to children's books.

Daniel McMahon/Business Insider

The children's section features a mural painted by Michael Martinez.

Daniel McMahon/Business Insider

Magazine lovers will find a good selection of popular titles.

Daniel McMahon/Business Insider

About half the store is dedicated to Amazon's electronics.

Daniel McMahon/Business Insider

'The Kindle came out 10 years ago, and for the past couple of years people have been asking for a place to test-drive our devices and ask questions about them,' Cast said.

'As we added devices -- from the Kindle to the Fire tablet and Fire TV and Echo -- our ecosystem has become more complex. We now have Audible, Prime Video, Prime Music, and Amazon Music. So there's a place to get those questions answered.'

There are lots of Amazon electronics, like speakers ...

Daniel McMahon/Business Insider

... and Fire tablets.

Daniel McMahon/Business Insider

Or you can listen to titles through Amazon's Echo devices and its audiobook seller Audible.

Daniel McMahon/Business Insider

There are even kitchen appliances ...

Daniel McMahon/Business Insider

... and turntables and records.

Daniel McMahon/Business Insider

For people interested in learning about Echo and Kindle devices, the store offers 'Flash Courses,' 5-7-minute tutorials, every Friday through Sunday.

Daniel McMahon/Business Insider

Cast said Amazon is eager to be in different cities, different types of malls, and different types of neighbourhoods. It has opened five stores so far and has plans to open at least five more.

'Our big focus is to be where there are readers,' Cast said. 'So far, we have been on the West Coast and the East Coast, and we want to bring a store to different cities. Chicago is one of the world's greatest cities and we wanted to be here.

'Chicago is a city of readers -- passionate readers.'

This is the second Amazon Books location with a coffee shop. The beans come from Oregon-based Stumptown and the locally baked pastries from Poppies Dough.

Daniel McMahon/Business Insider

'There is really an old-fashioned mission to provide a great bookstore for customers,' Cast said. 'We hope to become part of the fabric of the neighbourhood. We've had lots of kids and families in the store.

'And we're known for great customer service. We're excited to take our customer obsession and apply it to a physical store where we can have a relationship with you and learn more about your life and help you find great books.'

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.