Browser to buyer, Amazon style

<p>In the future, we may be able to fulfil our every shopping urge, be it for books or buckets, at the click of a mouse. A nightmare vision to some people, perhaps, but to cyber retailer Amazon.co.uk it will be a dream come true, because Amazon aims to become a one-stop internet shop for everything.</p><p>"We want to be the world's best customer-centric company," said Robin Terrell, before his recent departure as Amazon.co.uk m.d. "We want to be where you can discover anything that you want to buy online."</p><p>At first, publishers welcomed the retailer's arrival on UK shores, but seven years on, relations are starting to strain. Cracks began to show when Amazon triggered price wars by deep discounting sure-fire hits such as Harry Potter, using it as a loss leader to buy market share. The cracks matured into fissures as its Marketplace feature took hold, enabling booksellers and individuals to sell used books alongside new versions of the same.</p><p>Marketplace also alarms authors and agents, who stand to lose royalties if used sales accelerate. Amazon's latest request for publishers to supply electronic versions of their texts for its Search Inside the Book browsing software has further rocked the relationships.</p><p>No competition</p><p>The problem for publishers is that Amazon so dominates internet bookselling. The premier league of high street booksellers has failed to compete online, leaving the field open. Waterstone's and Borders/Books Etc handed their online business to Amazon to run. Ottakar's is plotting an online comeback, but has a serious game of catch-up to play.</p><p>Amazon.com Inc grew from a standing start in 1994 to global sales of $6.92bn and operating income of $440m last year. It is notoriously secretive about its UK figures, but informed sources estimate that, of the total UK book market in 2004, Amazon.co.uk accounted for 8%, or &#163;155m, up &#163;5m year-on-year.</p><p>"We have not hit a plateau in books. There is still huge scope for growth," Kes Nielsen, senior vendor relations manager, says. "A few years ago, you may have been able to identify a typical Amazon customer. Increasingly, we're doing well in categories that are streets apart. We wouldn't pin ourselves to a demographic such as 'market towns' or 'upmarket'. We offer every type of book for every type of customer."</p><p>Amazon's broad appeal has seen off Bertelsmann-backed bol.com and Alphabetstreet.co.uk, and has grabbed share from all parts of the book market. "We're taking a little bit of a lot of different markets," Nielsen says. "We create a marketplace to make books available where people didn't have the opportunity to buy them before--during a five-minute break in the office." Book clubs, mail order, high street and campus booksellers have all felt Amazon's presence.</p><p>The academic market has transformed: John Smith&amp;Sons sold to Coutts; Blackwell Retail has been looking for an exit; and Waterstone's campus stores are viewed internally as one of its biggest challenges.</p><p>"We took hold with students and academics, and they are still important as a share of the business," Nielsen says. "It's an area that continues to grow and change--the academic selling period is longer because people have got used to not having only a short window in which to buy books on campus at the start of term." For many academic and professional publishers, Amazon accounts for up to 20% of sales. One academic bookseller says: "It has created a perception of being the cheapest in the market, which is not always true, but it appeals to cash-strapped students."</p><p>Among Amazon's competitive advantages is its vast "data warehouse", which stores information about all its customers and every transaction they make (globally, it invests upwards of $60m a year in IT). From this, it is able to create personalised marketing emails the like of which turn other booksellers, and publishers, green with envy.</p><p>"We know every time we have sold a copy of Salman Rushdie, where it has gone. When he has a new title out, or there's a new title by another writer of magic realism such as M