pact on property, believing that the sprinkle of openings was too limited in scope and too oriented toward driving sales online to be much of a boost to shopping centres or Main Streets. That was before Sandeep Mathrani, CEO of US mall developer, General Growth Properties, was reported recently by the Wall Street Journal to say that Amazon is planning to roll out as many as 400 bookstores in the US. If Mathrani knows what he is talking about – and the chances are that he does – then it could change the game in terms of the knock-on effect on property. It could also create a new benchmark for how online and offline retailing will be integrated. And the story within the story – again a boost for landlords – is the remarkable re-emergence of books as a viable retail category for physical stores. Amazon’s new-found love of stores is striking, to say the least. Here we have the planet’s largest, most technologically advanced and arguably most successful e-commerce operator deciding that stores are necessary after all. It all began in early November last year when Amazon opened a bookstore at University Village in Seattle. University Village is a trendy lifestyle centre with approximately 120 stores that serves an affluent customer base on the north side of the city. For those who aren’t up to speed with their technical shopping centre definitions, the term ‘lifestyle centre’ refers to an open-air shopping and dining destination, often combined with non-retail uses, designed and configured to mimic a ‘Main Street’ or ‘urban village’. There are hundreds of examples around the world, but very few in Australia because of a long-held and arguably erroneous view shared by many Australian property developers, consultants and bankers that shoppers don’t like them. The Amazon store offers books that are selected on the basis of Amazon.com customer ratings, sales and other factors considered relevant by the company’s ‘curators’. In other words, learnings obtained from online operations have been used to curate the inventory at the physical bookstore. All along this has been a key advantage of e-commerce for omnichannel retailers – the ability to lower the risk of committing to physical real estate by using e-commerce data to pinpoint ideal store locations and fashion the merchandise mix. Williams-Sonoma, for example, has long done this for its home furnishings stores. Now, Amazon wants to roll out up to 400 bookstores, which, coincidentally, is roughly the number of lifestyle centres in the US. Why? First, for the very reason just mentioned – real estate risk is lowered dramatically if you can use sophisticated data gathered from online operations to identify profitable sites and fine-tune your merchandise mix for each. Second, Amazon has always suffered from the fact that its e-commerce operations don’t allow customers to try Amazon’s hardware before they buy. The stores would solve that problem. Third, it gives customers the opportunity to shop Amazon’s products in multiple channels, thus enhancing Amazon’s brand and driving more sales online as well. Fourth, it makes merchandise returns easier and less expensive. Fifth, books could just be the beginning of a multi-product offering. Remember, Amazon.com sells everything. Sixth, e-reading has not taken the world by storm as once expected. People still have a strong affinity for hard-copy books. The retail property impact Now, here is how the Amazon story promises to influence real estate far more profoundly than the smattering of store openings we’ve seen so far from e-commerce pure plays:    Anything close to 400 stores would constitute a genuinely substantial rollout, even in a country with as many shopping venues as the US has. It would fill a meaningful number of vacancies that have occurred partly because of the growing market share of e-commerce itself.    It will introduce into physical real estate the same state of the art technology and retail innovation that Amazon is famous for online. This could have a potent knock-on effect across the store-based retailing industry worldwide. Shopping centres and Main Streets could legitimately boast that e-commerce doesn’t offer customers a fraction of the shopping experience that stores do.    The herd instinct – if Amazon’s experiment is successful, then it will encourage other pureplay retailers to do the same.    As noted above, it would put books firmly back on the map as a store-based retail category, confirming that readers still love hard copies after an initial flirtation with e-readers. Care must be taken how this revival of the bookstore is interpreted. Amazon will need to reinvent the category to offer a complete new experience, in the same way that Taiwanese book retailer, Eslite, reinvented it in Taipei and Hong Kong. The uninspiring boxes of old are not coming back. Australian retail property owners should watch the Amazon rollout – assuming it goes ahead – with great interest. The implications for Australian shopping centres are significant, even if Amazon itself opens no stores here. I’m betting that if Amazon doesn’t, a copycat will. Landlords are struggling to come up with alternatives to food as a way of catering to consumers’ experiential needs. Books, like sport, is a perfect lifestyle category that shopping centre owners would dearly love to be reinterpreted and refloated in their malls. Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.