Final answer:
Amazon revolutionized the book industry by utilizing online delivery and economies of scale, causing traditional bookstores' decline and promoting digital book sales. Their strategy includes computerized warehouses and offering e-books through Kindle, reflecting an innovative approach to meet consumer demands.
Step-by-step explanation:
Amazon has revolutionized the bookstore industry by leveraging online retail, causing a significant shift in how books are sold and tremendously affecting traditional bookstore models. By bypassing physical store costs, Amazon's business model focused on online delivery and purchase, providing a vast selection at lower prices due to economies of scale. This convenience, extensive selection, and cost savings have not only led to the demise of many traditional bookstores, such as Borders, but also put pressure on other big players like Barnes & Noble. Moreover, Amazon's foray into e-books with the Kindle device led to a boom in digital book sales, offering cheaper and faster access to books for consumers and eliminating the need for inventory, shipping, and returns for publishers.
As part of its strategy, Amazon holds inventory in large, computerized warehouses located in areas with lower rent, driving down costs with automated processes and scaling up operations. Contrary to the claim that Kindle owners buy fewer books, data has often shown that owning a Kindle often incentivizes users to purchase more books due to the ease of access and more affordable prices of e-books. The expansion into hardware was not due to a decline in book sales, but part of a broader strategy to dominate the book market and enter new tech markets. Amazon's success has been achieved by dismantling traditional retail book selling and continually innovating to stay ahead of the competition and meet consumer demands.