Amazon.com Prediction
If anyone has been following Amazon.com's movements, it should be clear that they are planning something big. I predict it will be one of two things.
They have or are building distribution centers all over the country. They have invested millions and employed thousands. Why would they do this?
The most obvious reason is that they are trying to blur the lines between traditional retailing and online retailing. As the world's largest pure ecommerce company, their stiffest competition comes from the store that is within driving distance. Brick and Mortar customers don't have to wait, they can touch and feel the product and they can use it that same day. How do you overcome this as a 100% online retailer. You do this in one of two ways.
1- You minimize the time it takes to get items into customers' hands. They've done a great job with this. Amazon's Prime program allows 2-day shipping from their distribution centers anywhere in the continental USA for a reasonable annual fee. The next logical step is to find a way to offer SAME DAY DELIVERY. Given how many distribution centers that Amazon has built, it wouldn't be a very hard thing for them to offer same day delivery on select merchandise. I predict this will be something they launch in 2012.
2- The other way for online companies to compete with bricks and mortars is to become one. Yes, that's right, how difficult is it to imagine that Amazon would shy away from creating physical warehouse-type retail locations? If nothing else, it could be a liquidation arm for merchandise that comes back from customers. At some point, this may even be essential for Amazon to maintain its top position. As proof of this, all you need to do is look at the companies that are growing significantly and those that are spending significant amounts of cash on online advertising. Take a look at Target and Walmart. These companies have a keen understanding of what it takes to be successful in retailing and advertising is one of those pillars.They spend millions on online advertising. And if you can order online and pick it up in-store, why would you order from Amazon and wait for it to be delivered?
I expect that we'll see same day delivery in 2012 and bricks and mortar by Amazon in 2013 or 2014.
