I do a lot of thinking about Amazon, because I feel it’s on the verge of massively disrupting Google and, on a much, much larger scale, retail as a whole.
Today, let’s talk about retail. Here I mean retail across the board, save specialty stores (Apple, Bose, etc.) and emergency sundry retailers (pharmacies, some grocery stores, etc.). If I’m right, a large swath of retail as we know it might be quite well dead in five years, with a few exceptions.
What makes Amazon tick isn’t prices – unless you’re a Prime member, in which you get free two-day shipping on everything. But if you’re not a Prime member, you pay for shipping. And once you pay for shipping on Amazon, you’re roughly at mainline retail prices.
So for many folks, price isn’t a major incentive to shop at Amazon.
So, then: Why are people choosing Amazon in increasing numbers, from quick everyday jaunts to full-on holiday shopping sprees? I have three things I always come back to when I’m on the road and kicking this topic around:
- Insanely quick and accurate shipping
- Brand image/trust
Let’s be honest: getting in the car and burning fossil fuel to drive on construction-riddled roads to go to a store and buy something is becoming – has become? – a massive pain in the keister. As the holidays draw near, the mere idea of going out and battling legions of stressed shoppers is enough to give any determined taskmaster the howling fantods. Assuming you’re OK with Internet commerce, it’s massively, exponentially, galactically easier to log into Amazon, run a quick search, and buy something with 1-click shopping. Total elapsed time, assuming you know what you’re shopping for: maybe two minutes – if you didn’t get hijacked by one of Amazon’s scary-accurate and compelling ‘customers also bought!’ suggestions. A day or two later, your stuff shows up at your door, and boom, done. You never left the house. It’s the slightly time-lapsed reverse teleportation game. Fun!
Insanely quick and accurate shipping
To me, this is the cornerstone. This is Amazon’s iPhone, its halo, its addictive magic.
No other company on earth ships as quickly or accurately as Amazon. Despite everything I’ve bought on Amazon, never once have I had a shipping issue. Not one. And sometimes, an item will actually show up earlier than it should. Earlier. When that happens, I just shake my head and wonder how ‘regular’ retail will ever compete.
And then I think: it won’t. It can’t. The model has almost been disrupted entirely. We just haven’t seen the full picture yet.
But we will.
There is nothing shady or scary or untrustworthy about Amazon. They sell things and get them to you more efficiently than anything on Earth. Their security is top-notch, their commenting system is a fantastic research tool, and returns are almost as easy as Zappos. They do what they say. They never miss on logistics. You can shop the way you want, with no annoying salesperson who’s vying for a spiff to harass you. If you want to buy a camera and read all 500+ reviews while drinking raspberry hot chocolate in your underwear, go for it.
(Purely hypothetical scenario, of course.)
In a nutshell, people trust Amazon. That’s the ultimate brand goal of any company: pure, gleaming, frictionless trust. Amazon has it in spades.
Amazon’s nuclear warhead
There’s some talk out there about Amazon working towards same-day delivery. That is, if you order a coffee grinder at 11 AM, you will have it by, say, 3 PM. You won’t have gotten in your car. You won’t have gone to pick anything up. Heck, you might not have even gotten dressed. Sure, you might have paid a nominal fee for such convenience, but that is offset buy the gas and time and shower water you saved.
In short, you will have just experienced the zenith of retailing: trustworthy web commerce coupled with instant gratification.
If this comes to pass, this will put the icing on the doom cake for retail. In fact, if something like this is even close to being real, the pox of empty strip malls will only get worse as the market implodes violently.
Does this cast a shadow?
Is there a downside to what seems to be this utopian scenario for consumers? Of course:
- The economic and social impact of a physical industry literally dying before our eyes, and the artifacts (jobs, buildings, etc.) it leaves behind, and
- The ascension of Amazon as The Big Retailer, a credit card-devouring Skynet, that runs everyone’s commerce everything and has millions of credit card numbers and is literally so big and powerful that nobody can compete with it. Logistics is hard and expensive. Building a merchant base isn’t done overnight. Keeping your brand squeaky-clean is studied every other month by HBR.
For consumers, it will be a revolutionary step forward, but at a macro level, I don’t think we realize the full set of consequences something like this will have.
Still, it’s coming. I would bet money on it.amazon, Business, commerce, consumers, finance, fulfillment, logistics, shopping Posted by