Amazon's plan to open a new bookstore in midtown Manhattan is just an "on-ramp retail" strategy, investor and Inside.com Founder Jason Calacanis told CNBC on Wednesday.
Calacanis says the move is less about selling books and more about building out the company's online retail ecosystem.
"There are a number of people that haven't become a prime member and haven't played with the Kindle. This is Amazon's way to do on-ramp retail and relationship retail," said Calacanis.
Amazon's data-driven physical retail store is similar to the Apple store, he said. "You don't know how to use the iCloud service or photos and you are not sure what Apple TV is, and they educate you," said Calacanis. "It services the people who are very specifically fans of your product and deepens and strengthens that relationship," he said.
He added, "It also serves as an onramp to your entire ecosystem. If you look at Amazon
"You are talking about generating tens of millions of dollars per store if you could convert 50 people to Amazon Prime," he said. "We all know the LTV [lifetime value] of an Amazon prime member is low thousands of dollars."
Amazon shares hit an