What they are doing, and which the article really skims over, is constantly offering things that you simply can't find at Amazon. They have a comprehensive, well curated staff review section. Their "New Fiction" and "New Non-fiction" is filled with carefully selected books that people wouldn't be able to find just from looking at the NYT Best Sellers list. (Indeed, their NYT Best Sellers rack is given less than prime real estate.) They're constantly holding book signings, poetry readings and other such things to engage the community (which the article mentions quickly, in fairness). And they also have a floor dedicated entirely to used books - the only general used book store in all of Harvard Square.
The competition that Amazon crushed, B&N, Borders, and the like - they tried none of those things.
This bookstore didn't do anything more special than actually work hard to beat Amazon. Oh, and they also picked a location literally across from Harvard Yard, filled with a constantly rotating customer base with a penchant for reading. That helped too.
I'd like to see a chain really try to differentiate itself from Amazon through similar hard work - picking places where people obviously want to buy books, and offering them a great bookstore that differs from Amazon in scalable, consistent ways.