Amazon is making some news today with rumors about a brick and mortar store opening in London. I think that this is a window into the future of retail where established online retailers will be dipping there toes into the shark infested waters of traditional retail. I think that online retailers have a distinct advantage in inventory and supply. They know how to get things to customers quickly and they know how to forecast what they want - sight unseen. While there may be big advantages traditional retailers have, I think the days of walking into mega stores are over. The Borders business model had a good run but it is clearly done.
While there are thousands of factors to consider in making a move like Amazon is seemingly trying to do, I think one of the biggest things is something overlooked. Shipping. All online companies rely on carriers that they have little control over. If Amazon looks at their customer satisfaction score or NPS (and I'm sure they do) they'll see that most detractors come from delivery and carriers. In the US it can be the USPS in England it can be the national carrier service that recently went on strike and caused major problems. Amazon can deliver to stores for pickup themselves on more items from a regional DC. The more control over carriers the better. It's something that Netflix has mastered.
Looking forward to a very interesting next decade in retail.
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