The exciting news that is being speculated is that Amazon may be expanding and opening a physical retail location. This is surprising due to the recent struggles of book stores, precisely as a result of Amazon, see Borders Bankruptcy, and the rapid closing of independent book stores as the general public is less inclined to read. I think that just looking at those factors would mean that investing in retail locations would be a mistake. However, the angle that Amazon can use to be profitable, is to sell high margin books, Kindles, Kindle accessories, and offer some kind of a cafe. Unfortunately, fellow Seattle based - Starbucks is in contract with Barnes and Noble, the dominant physical book retailer, and fierce competitor of Amazon, because that would be a match made in heaven. I think that Amazon could work with another company to create a great cafe experience, with free wifi, a custom, rotating, selection books, the possibility of ordering books from the site to be picked up at the store and comfy lounge chairs, could be a great way to gain market share.
According to the sources I have seen, this is basically the model they are considering. The rumor is that they will open a location in their hometown, Seattle, known for its willingness to try new things in technology and a love for cafes! They are not looking to create a Barnes and Noble superstore, more like a boutique, and I think it can be a successful new line of business to drive profits for the e-commerce giant.
Source: Ritholtz
