Uh oh, local retailers. From Slate.com:
Amazon’s new goal is to get stuff to you immediately—as soon as a few hours after you hit Buy.
Amazon same-day delivery: How the e-commerce giant will destroy local retail.
What does this mean for your retail business?
How can we overcome this?
My partners and I have some ideas. What are yours?
The machines are drilling down to the core of Zion. What are you prepared to do?
First, let’s see them actually do this. It sounds good, but it will be expensive. Their current cost structure won’t be able to handle it. Will they get kickbacks from their vendors? Will they blow through more VC cash to try to knock out the competition before they have to pay the piper? Will they be able to make the system work from day one and not blow up in their face? There are a lot of ifs in this gamble that may not pay off.
Second, how will it really change the game? The writer of the column is already a major Amazon fan. No surprise that he is excited about it. But if same day delivery comes with a hefty fee, then the price advantage is blown out the window. Therefore, the people to whom this will be most attractive are the Relational Customers already in Amazon’s court.
We all know how hard b&m retail actually is. This is practically a step towards that aim for Amazon, but I am not sure they will be able to pull it off through their current management system and modes of operation. It is one thing to be an online, faceless corporation. But once they start including direct, face-to-face interactions, the game changes for a lot of customers. And Amazon’s current policies of treat-your-employees-like-dogs, they-should-be-happy-they-have-a-job, will only go so far when those employees begin making personal deliveries.
The Post Office, in spite of it’s government monopoly, loses money making deliveries. UPS and FedEx have the infrastructure to make deliveries and know how expensive next-day is. My educated guess is that Amazon is either banking on this being the straw that breaks b&m backs so they can monopolize, or that customers will be so enamored by Amazon that they won’t mind paying extra for such a fee.
Game changer? Not any more than the Internet itself has been a game changer. In fact, I almost have a sense it will be as much a fiasco for them as it will be a problem for us.