To my mind, Amazon’s biggest strategic advantage is that they started without brick and mortar retail. The business was built for ecommerce and then, using the systems and data they’ve developed, they could look at brick and mortar making sure to have the right number of stores in the right places configured in the right way. To put it another way, their brick and mortar business, whatever it turns out to be, supports their ecommerce. With existing brick and mortar retailers, it’s the other way around.
As regular readers know, I’ve called the “omnichannel” the word that legacy brick and mortar retailers use to put a positive spin on the fact that, unlike Amazon, they have the wrong number of stores in some of the wrong places configured the wrong way.
You also know that I’ve ranted and raved a bit about the fundamental, unavoidable, inevitable changes in retail that, if they aren’t here quite yet, are coming. Not to mention the ones none of us have spotted. I’ve talked about 3D printing, software that will take your measurements in your home, an on demand knitting machine, Intel’s upcoming in store garment “printing” machine and associated systems and a machine where you can put in an unadorned sneaker and it comes out colored and/or with a pattern.
And everything I’ve written is old news to Amazon. The probability is that they conceptualized some of this stuff years ago, and have just been waiting for (and encouraging) the technology to catch up.
Below I provide links to a couple of articles on their apparel business that somebody forwarded to me. I may be the messenger you most want to shoot, but the future is today.
Here’s the link to article one and article two. Amazon has received a patent for an on-demand clothing manufacturing warehouse and are moving to exploit it using some of the ideas I’ve highlighted. By the way, if there was no Amazon, somebody else would be doing it (though probably not with Amazon’s scale, I recognize). And others will be doing it anyway.
Meanwhile, Ali Express, which I trust you are aware of, ships inexpensive product from China. With free shipping. And no sales tax. I’ve heard from people that this is often the source of products you see on other retail web sites (eBay comes to mind). At higher prices of course.
Yes, yes, I know. Takes too long to arrive, and you worry about quality and returning something. You’re right of course. I’m sure it will never get any better and they aren’t working frantically to improve those possible shortcomings. Or, just maybe, the price differences on some items are enough to make you order from them (perhaps something cheap you don’t need right away) and see what the experience is like.
Amazon’s advantage over Ali Express right now? Credibility and reliability I’d say. I live in Seattle. Amazon orders typically arrive the day after I place them even without expedited shipping. Ali Express can’t beat that.
But I wonder- could the disrupter be disrupted by lower prices, improved credibility and processes and delivery that at least improves? It would not be hard, for example, for Ali Express to have a U.S. return address where they consolidate and redistribute returned product. Might that ultimately allow for free returns and faster credits?
What might keep Jeff Bezos up at night is figuring out how to make Amazon so overwhelmingly convenient that it’s the only place people bother to go. He won’t be able to accomplish that with me.
Okay, time to go enjoy the rest of the Memorial Day weekend now that the sun is finally out in the Northwest. You do the same and remember why we have it.