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Dispatches from the Digital Revolution

Digital gets real

recent Digital Book World article caught my eye this week, mostly because of the big names involved: Amazon and Wal-Mart, the titans that I like to think of as the equal and opposite forces of the digital and physical retail scene, respectively.

The gist of DBW’s brief report: “Wal-Mart will no longer carry Amazon’s Kindle devices beyond commitments it has already made to do so.” Like Target, which made a similar move in May, Wal-Mart is joining the ranks of retailers who want to avoid being a free showroom to feed Amazonian coffers. (Free, of course, being relative—there’s certainly money changing hands somewhere down the retail chain.)

And among all the interesting implications about these physical retailers’ decisions, the thing that sticks out to me: wow, folks. This is getting real.

Although the Internet has been a major disruptor in the retail industry for many years now, most retailers have yet to shake themselves from the pressures of “the way things have always been done.” In fact, no one has quite figured out how to resolve the critical question of showrooms: can we have physical stores whose main revenue comes from digital purchases?

Certainly not if the digital purchases are being booked by a company that has very little invested in said showroom. Sure, Amazon may pay retailers a handsome co-op to ensure they get lots of display space, but they’ve neatly sidestepped all of the risk, overhead, and sustainability issues that come with a brick and mortar store. And at the end of the day, the customer is checking out the Kindle in-store, then going to home to buy it from Amazon—not from the company that is investing in the brick and mortar store.

And the result of Amazon’s experiment with showrooms at one remove? Granted, the final tally hasn’t come in, but it’s significant that box stores have said “no” to Kindles. Digital is proving its worth—and, with that, its threat—in a way that retailers are starting to comprehend. And if the Kindle situation tells us anything, I think we’re seeing them back up this understanding with a realignment of retail strategy.

The book world is a bit in the same position. We know digital is a problem for print. We know online sales are hurting booksellers. But what can we do about it? I’m curious whether the stance of big box retailers against the one-stop-shop of Amazon devices is catching. Will physical stores become more aggressive about getting customers into stores?

I’m also curious what that would look like. In what ways can independent retailers incentivize customers to visit—and purchase in—the showroom? Especially retailers of goods that are becoming increasingly intangible, like books and other media? Is there a solution to the question of showroom vs. sales floor? Can we have physical stores whose main revenue comes from digital purchases?

Regardless, digital has proven itself to be greater than an abstract page of code. Digital is real, and digital is moving in ways that the physical world can no longer ignore.

About Leah Thompson

Writing and publishing professional in the Boston area.

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This entry was posted on September 26, 2012 by in Business and tagged , , , , .

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