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Thursday, July 12, 2012

Amazon's Same-Day Strategy Could Kill Brick-and-Mortar Retail Dead

Posted by on Thu, Jul 12, 2012 at 12:21 PM

Last night, Slate published a story about Amazon's surrender in the local sales tax war, and how their next move could be even more disruptive for local businesses:

But now Amazon has a new game. Now that it has agreed to collect sales taxes, the company can legally set up warehouses right inside some of the largest metropolitan areas in the nation. Why would it want to do that? Because Amazon’s new goal is to get stuff to you immediately—as soon as a few hours after you hit Buy...It’s hard to overstate how thoroughly this move will shake up the retail industry. Same-day delivery has long been the holy grail of Internet retailers, something that dozens of startups have tried and failed to accomplish. (Remember Kozmo.com?) But Amazon is investing billions to make next-day delivery standard, and same-day delivery an option for lots of customers. If it can pull that off, the company will permanently alter how we shop. To put it more bluntly: Physical retailers will be hosed.

This story probably sounds histrionic to a lot of you, but it seems pretty reasonable to me. When the Great Walmart in the Sky starts offering near-instant gratification, a lot of small retailers are going to feel the same Amazon pinch that bookstores started feeling a decade ago.

 

Comments (37) RSS

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1
I'm still pissed about the discovery of fire by humans, it ruined nighttime, winters and dinner.
Posted by Sugartit on July 12, 2012 at 12:30 PM · Report this
GlamB0t 2
I can't wait for same day delivery. Sorry, Paul. I know you hate all things Amazon, but this has been a long time coming.

Retailers don't need to be "hosed" if they have both a retail outlet and join the rest of us in the technical revolution by also selling their shit online.

It's like listening to record companies bitch about how tape decks are going to ruin the record industry. Sorry, you have enjoyed ridiculous profit margins for decades. Your glory days are over. Evolve or die.
Posted by GlamB0t on July 12, 2012 at 12:33 PM · Report this
3
Amazon has already gotten stuff to me same day multiple times. They do have warehouses in the Seattle area. And I'm a prime member which means that if I order something early enough on Friday I can overnight it for a low cost and it would be delivered Saturday. The issue is that Saturday delivery is expensive for Amazon to pull off, it's apparently cheaper for a courier service to just drop it off at my house.
Posted by arbeck http://www.facebook.com/arbeck on July 12, 2012 at 12:38 PM · Report this
Garfield 4
I agree with the others. I love Amazon. It's made buying & reading books a quick pleasure. Progress=good.
Posted by Garfield on July 12, 2012 at 12:43 PM · Report this
Matt the Engineer 5
Nordstrom does this for a moderate fee right now.

Man I miss Kozmo.
Posted by Matt the Engineer on July 12, 2012 at 12:45 PM · Report this
6
They've been doing this in Seattle for a while with a bunch of their top products. It was pretty odd because it's not a delivery truck that brings it to you. It was just some guy in his car that they contract, but hey, whatever gets the job done!
Posted by doceb on July 12, 2012 at 12:46 PM · Report this
Kinison 7
If you dont own a car, banning plastic bags made it a tad harder to carry groceries home. Its laughable that people expect pedestrians to carry 4 cloth bags in their pockets at all times. So now people can order groceries from Amazon and have it delivered. Maybe Kroger will close a few QFCs in the area once people realize how easy it is to order groceries online.
Posted by Kinison http://www.holgatehawks.com on July 12, 2012 at 12:46 PM · Report this
keshmeshi 8
I don't know. It's really hard for me to sympathize for brick-and-mortal retailers at this juncture

Case in point: I've been doing my best to avoid Amazon because I hate its business practices, but, last week, I wanted to buy a computer game. Good luck buying one in this city without driving up to Northgate. The video game retailers in the city's core sell console games only. So, the choices are: waste gas and tons of my free time; buy from Amazon. So, I bought from Amazon.

If you need something specific that isn't groceries, you don't want to drive to the other side of town, and you don't want to wait weeks for a special order, buying online is the only option.
Posted by keshmeshi on July 12, 2012 at 12:49 PM · Report this
Fifty-Two-Eighty 9
Yeah, but can they get me a Randall knife here tomorrow? Nope. Still a five-year wait. Nothing is perfect, or ever will be.
Posted by Fifty-Two-Eighty http://www.nra.org on July 12, 2012 at 12:50 PM · Report this
10
They will have a hellava time getting their stuff to the USPS hub on 4th Ave S, as well as UPS and FedEx on Airport Way, with all that arena congestion in the way between those places and the warehouses. But, Amazon didn't think of that when they agreed to crawl into bed with Chris Hansen and Steve "worst CEO of the year" Ballmer.
Posted by hmmmmm on July 12, 2012 at 12:51 PM · Report this
Cato the Younger Younger 11
@7, if AmazonFresh was cheaper then I'd agree.

But it is the smaller retailers who have themselves to blame for the most part. Adapt to the new challenge, provide a much better service if you can beat price and really sell yourself. Case in point. I live in Wedgwood and there are three places I can get coffee in the morning: Starbucks, Top Pot and Greatful Bread. And guess what? I go to Starbucks because they open an hour or two earlier than the other places and I head to work early.

So if the local retailers want to compete with Amazon and even beat them then they need to up their service and make the "mom and pop" the first choice and Amazon the back up plan.
Posted by Cato the Younger Younger on July 12, 2012 at 12:52 PM · Report this
Fnarf 12
@8, that's because Amazon and other online retailers have already killed them off, not because the retailers are lame.

See how you like your neighborhoods when all the storefronts are boarded up, or converted to one Pilates studio after another if you're "lucky".

In a sense, though, Seattle's getting what it asked for when it decided that big box stores were the only kind worth having. In this regard we are more akin to soulless hellholes like San Jose or Phoenix or even Kansas City than we are to proper cities.

On the other hand....when does Amazon get a liquor-retailing license in this state?
Posted by Fnarf http://www.facebook.com/fnarf on July 12, 2012 at 12:53 PM · Report this
13
It just seems like every step Amazon takes to compete with brick-and-mortar retailers just makes it...more like a brick-and-mortar retailer. How would setting up warehouses offering delivery in every metro area be different than Wal-Mart offering delivery from its stores? I have to assume that the reason Wal-Mart doesn't do that is to keep overhead and operational complexity down. Maybe Amazon will do an efficient enough job of it to put some places out of business, but it just seems like serious diminishing returns territory.
Posted by slithy on July 12, 2012 at 12:56 PM · Report this
14

Disagree.

People love to shop, and go out shopping.

You've fallen into the "everyone thinks like me" trap.
Posted by balmontguy on July 12, 2012 at 1:02 PM · Report this
GlamB0t 15
@12 There are shops I will always go to because I love them and their service/owners. Amazon will never gain my business over them. Ever. I know I pay more, but enjoy supporting their business.

I believe those monstrosity shopping malls are going to get hit the hardest when there are only teenagers loitering and not many adults actually shopping. It will also hit large box stores like Home Depot, Wal-Mart, hard because Amazon will offer the same prices they do, only same day to your door delivery.

Imagine the next Holiday season when you can do your last minute shopping online in the morning and it's at your door when you get home.
Posted by GlamB0t on July 12, 2012 at 1:05 PM · Report this
Joe Szilagyi 16
@8 buy it from Valve and support another great local company?
Posted by Joe Szilagyi http://www.zombo.com on July 12, 2012 at 1:21 PM · Report this
Urgutha Forka 17
I agree with @14

Online buying is convenient and great, but I still like to go to actual stores for some things, especially things I want to compare, in hand, side by side. Things I want to get an idea of the size or weight or feel for. You can't do that online.
Posted by Urgutha Forka on July 12, 2012 at 1:25 PM · Report this
18
@10, Amazon is in bed with Microsoft? News to me, since prime video is on PS3, not XBox, they have a kindle while MS invests in nook, etc.
Posted by Tawnos on July 12, 2012 at 1:32 PM · Report this
Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn 19
I've visited something like 15 (so far) bicycle shops in "bike friendly" Seattle looking for one that actually stocks real BMX racing gear for my kid.

Here's a suggestion: how about the brick and mortar stores stop whining and start offering some instant gratification?

This new Amazon thing could have saved me a lot of grief, not to mention gallons and gallons of fossil fuel and carbon emissions.

(Confidential to you bike fuckers: stop advertising your store as a BMX shop if you don't carry doodly squat BMX shit. It's not funny.)
Posted by Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn http://youtu.be/zu-akdyxpUc on July 12, 2012 at 1:40 PM · Report this
Sir Vic 20
@14 Disagree.
Many people aren't physically able to go shopping for several hours at a time. Some of us get enough fatasses, precious doggies and trophy toddlers in our day-to-day life, and don't want to deal with that shit just to find a food processor or pair of speakers. Not everyone is so infatuated with their wardrobe that they have to rummage through piles of clothes to find the 'perfect scarf'. Some of us just look at shopping as yet another chore, and the easier to accomplish, the better.

That's the counterpoint to your argument.
Posted by Sir Vic on July 12, 2012 at 1:42 PM · Report this
Badger 21
For me, the experience of shopping on-line from Amazon is far less interesting than shopping in a brick and mortar store. Some of my favorite books are books that I discovered at random on the shelves of a store. Amazon is great if I am looking for a specific title, but terrible at introducing me to new authors and ideas. I feel the same way about Netflix - they may be convenient, but they are also limiting.
Posted by Badger on July 12, 2012 at 1:48 PM · Report this
Catalina Vel-DuRay 22
If we shop from home, and get everything delivered, and then work from home, what will happen to fashion? (Not that I care, but I know there are those who do)

But really - retailers bought this on themselves by having such crappy stores. I am of the generation that barely remembers when stores were gracious places where you could talk to a pleasant, well-informed, well-dressed salesperson, have a lovely meal at a reasonable price, and buy everything from potholders to Steuben - and probably have it delivered for either free, or next to nothing. If you needed something altered, they did it in-house, and usually at no charge.

Then malls came along, and they were admittedly better in some regards (same service, easier parking, no weather to deal with) but then most of them got stupid as well. Now, everything is low rent, and the merchandise is mostly crap.

If I have to shop, I like the Sears experience: You can go to their website and research, and if you find something you like, you can check to see if it's in stock at the local store. Then you can go check it out and maybe buy it. If you want to take it back, you can take it back there, not go through some big hassle of mailing it back.

(Yes, yes, other stores do this, but none of them are as convenient to Chez Vel-DuRay as Sears.)

I am glad that I have reached that point in my life when I really don't have to shop for much.
Posted by Catalina Vel-DuRay http://www.danlangdon.com on July 12, 2012 at 1:56 PM · Report this
urn 23
@18 Oh no! Someone is wrong on the internet! (Amazon video is absolutely available on the Xbox 360)

http://www.amazon.com/gp/feature.html?ie…
Posted by urn on July 12, 2012 at 1:58 PM · Report this
Will in Seattle 24
This is only true while the non-taxed nature of such firms is the case.

The arguments for it never did make much sense, quite frankly.
Posted by Will in Seattle http://www.facebook.com/WillSeattle on July 12, 2012 at 2:05 PM · Report this
keshmeshi 25
@16,

It was only available for download from Origin, and I'm not quite that stupid or masochistic. I do like Steam though.
Posted by keshmeshi on July 12, 2012 at 2:07 PM · Report this
26
We have been getting lightning fast delivery from Zappos. Order something this evening and it is here tomorrow morning. I think we may have gotten same day delivery from them by ordering something early one morning.

WE LOVE IT.

More to the point, rapid delivery of an online purchase actually does change the deal.
Posted by Charlie Mas on July 12, 2012 at 2:12 PM · Report this
keshmeshi 27
@12,

I understand that to some degree, but I still remember what it was like before online retailers existed. I called around to many retailers; if one had what I was looking for, I had to go way out of my way; if they didn't have it, I went without.

What I would have given for Amazon to have the selection they have now when I was in college. One semester, I had to read Paludes by Andre Gide. The university bookstore massively fucked up on every level for that class and didn't order enough books for most of the titles we read. I called all over, including to at least one store specializing in foreign language books, and no one had a copy. But lookee here. I could get one from an Amazon seller for $4.15.

It really shouldn't have been too much to ask to find a French-language novel in Manhattan in the late-'90s.
Posted by keshmeshi on July 12, 2012 at 2:20 PM · Report this
28
The beginning of the end. Thanks for ruining my day, Paul.
Posted by Bugnroolet on July 12, 2012 at 2:21 PM · Report this
29
@23
Good to see it came out a couple months after the PS3 support, though I don't like the policy of requiring gold to use my already-paid-for service (and the full library isn't yet available, two more weeks).

Still, the comment doesn't jive with the reality that MS should be partnering with Amazon for many things, yet instead tries to compete.
Posted by Tawnos on July 12, 2012 at 2:21 PM · Report this
raku 30
Cool, I can get a yellow slip on my door within hours?
Posted by raku on July 12, 2012 at 2:24 PM · Report this
31
This already happened -- my GF ordered a video game in the morning and it was delivered late afternoon. Of course, it was probably sitting in a SODO warehouse already, but I was still impressed by the speed.
Posted by K on July 12, 2012 at 2:36 PM · Report this
32
@26 - FYI, Amazon owns Zappos.
Posted by Online shopper on July 12, 2012 at 2:39 PM · Report this
33
@2 "Evolve or Die." Well, yes.

@8 gammaraygamestore.com
Posted by M. Wells on July 12, 2012 at 2:41 PM · Report this
keshmeshi 34
@33,

Gamma Ray sells board games, or am I missing something?
Posted by keshmeshi on July 12, 2012 at 3:07 PM · Report this
35
Damnit. This thread is cold but I just have to say that everyone kinda missed the point of this. Amazon is going to be collecting sales tax in the states it starts rolling this program out in. Hasn't this been the complaint all along? How Amazon (and other online companies) not collecting sales tax made it hopeless for small businesses to compete. So now they will be collecting sales tax and creating jobs (well not so much that since they are going to be using Kiva, but then SLOG is all mad about working conditions in the warehouses, so robots are probably best).

I mean this sales tax thing is pretty damn interesting and is going to have a serious ripple effect in e-commerce. Barnes & Noble has got to have a little smile on their face right now.
Posted by sisyphusgal on July 12, 2012 at 9:35 PM · Report this
Fenrox 36
Yeah but its a great day for messengers and delivery people!
Posted by Fenrox on July 13, 2012 at 10:11 AM · Report this
37
Lots of viewpoints on this subject but one thing is for sure...the social fabric of our downtowns is in jeopardy. Does Main Street become coffee shops, restaurants and hmmmm, nothing else?
Posted by nhtoyman on August 27, 2012 at 6:50 PM · Report this

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