Writers Tricks of the Trade ISSUE 3, VOLUME 7 - Page 17

AMAZON AND THE FUTURE OF PHYSICAL RETAIL (C ONT ’ D ) The New York Times did a story last week about one retailer that is apparently thriving in the face of Amazon competition. That would be Best Buy. Coincidentally or presciently, the Times did a story about Best Buy competing effectively with Amazon four years ago! The current story attributes Best Buy’s success to the obvious tactic of matching Amazon’s prices and to soft factors like being quiet about cutting costs (so as not to panic the employees) and “staying humble”. But the one single operational change Best Buy made to enhance their competitive position actually demonstrates why Amazon has the advantage over them and everybody else. And why that is not likely to change. Best Buy made to enhance their competitive position actually demonstrates why Amazon has the advantage over them and everybody else. And why that is not likely to change. The operational change Best Buy made was to use their distributed store inventory to ship online orders received centrally. The Times piece highlights the reduction in delivery time to customers that can be achieved by shipping from one of the 1000 stores that is closer to the purchaser than a warehouse with the same product. In fact, that’s only one of at least three advantages. The most significant is that they are undoubtedly able to fill orders with stock on store shelves that they would have lost completely by not having stock of the same item in a warehouse. The other is a much more efficient, and therefore profitable, use of their inventory. They effectively need less stock to fill more orders. Of course, all the retailers ]]HY[ܚ\Y܈ۙH[\\Y\XX[ [[ܝ\[XYBYH][\Z[[ۛ[H\[Y[ ]8&\]\^HY [[HYH][HB\\X[ۋ][Z[H؝\ۛ[H\[\[[[[XX[ [[ܝ\]\^BY\ݙ\[[Z[ [XZ\\\]]ܜY&] H\Xۙ]\K\\H\YHوHX\]HXۛZXY[YH][X^ۈ\Z[[]]ܙH]ܚ˜]H[YH[]Z[XH\[X[˂[X^ۈ\Z[H\H]ܚو\Z\\][]ZXH[]\\X][HXš\X][HXH[HTˈ][YHوHX[][ۜ[Y8']Z[8'H\۸&]X[B[H[][ˈ^H[XYHYH\[\[XHۛ\H]\][\[\ۜH[Bܙ\[[X^ۈ[YZ\\PܙHH\Hو[۝YH؜\Y]Z\ق\[]]XH[H\[[\]Z[\X]\H^H[[\H\[[ܞH]]ۈ\Z\H[\ۈܙH[\[XY ][[\HH[X[ۛ[H\\\\\™YX][K[][[H]Z[[XH]H[YH[YK\^K\X][[X^۸&\X[\X[YY[[Y\HX]ۙH\XقZ\[[ܞH[Z^][ۋH[Y\[X]\]\^H\[^Z[[\[\ܝ[\ Z\X[]H]H\]]ܜ\H[ZXܛٝ8%و\HY[Y\ܝZ\ۈ]Z[[›]ܚ%H\X[\[K[X^ۈ[&]] Y] ]H[Hو[X^۸&\[X][ۜ\Hۛۈ[XH][X^ۋ][ۈ[\[\]\]]]HY[YK UT8&HPшHQBQHBS M