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Retailers are largely still not profitable with internet sales. Pre-pandemic a brick and mortar was doing about 5-10% via online and it was at best break even.

Retailers are largely still not profitable with internet sales. Pre-pandemic a brick and mortar was doing about 5-10% via online and it was at best break even. Why would you invest money in something that was unprofitable when Amazon wasn’t even profitable for so long?

ethbr0 6y ago
The problem most retailers face is that competing with Amazon requires substantial, multi-year capex into their supply chains. The more forward thinking realized that the catch-up bill was only going to get more expensive, as Amazon continued growing and optimizing. The less forward thinking... well, there's Sears. As consumers, we rarely see "how" free 2-day shipping, same day delivery, BOPIS, etc. But suffice it to say, it's very expensive to retool legacy supply chains optimized for brick and mortar inventory delivery. Kudos to Walmart, Target, and Home Depot for seeing what was coming.
- quickthrower2 6y ago
  One way to outdo amazon in your niche is a better user experience. It’s not to hard seeing how bad amazons ux is. You need to attract people who value trust over pure price.
  - ethbr0 6y ago
    At some point, rubber meets physical road though. You can't offer 2 day shipping, if your supply chain doesn't support it profitably. Amazon's genius was leveraging marketplace and FBA to scale the logistics they also used (gee, kinda like AWS) while taking a cut.
    - quickthrower2 6y ago
      Well that's market segmentation. Some people want it to come quick. Others care about other things. I doubt 100% of people place 100% priority on delivery speed. In particular, I personally don't use Amazon much. Granted not in the US so maybe the site is different etc. But to me they are like an 'ebay' in terms of my trust in what they deliver, when sometimes I want a 'department store'. Now not everyone is like me but I suspect enough people are that Amazon isn't going to take over all shopping.
  - gogopuppygogo 6y ago
    If you think Amazon is bad try buying women’s clothes online from a discount retailer. Amazon puts them all to shame.

ethbr0 6y ago

The problem most retailers face is that competing with Amazon requires substantial, multi-year capex into their supply chains. The more forward thinking realized that the catch-up bill was only going to get more expensive, as Amazon continued growing and optimizing. The less forward thinking... well, there's Sears. As consumers, we rarely see "how" free 2-day shipping, same day delivery, BOPIS, etc. But suffice it to say, it's very expensive to retool legacy supply chains optimized for brick and mortar inventory delivery. Kudos to Walmart, Target, and Home Depot for seeing what was coming.

quickthrower2 6y ago
One way to outdo amazon in your niche is a better user experience. It’s not to hard seeing how bad amazons ux is. You need to attract people who value trust over pure price.
- ethbr0 6y ago
  At some point, rubber meets physical road though. You can't offer 2 day shipping, if your supply chain doesn't support it profitably. Amazon's genius was leveraging marketplace and FBA to scale the logistics they also used (gee, kinda like AWS) while taking a cut.
  - quickthrower2 6y ago
    Well that's market segmentation. Some people want it to come quick. Others care about other things. I doubt 100% of people place 100% priority on delivery speed. In particular, I personally don't use Amazon much. Granted not in the US so maybe the site is different etc. But to me they are like an 'ebay' in terms of my trust in what they deliver, when sometimes I want a 'department store'. Now not everyone is like me but I suspect enough people are that Amazon isn't going to take over all shopping.
- gogopuppygogo 6y ago
  If you think Amazon is bad try buying women’s clothes online from a discount retailer. Amazon puts them all to shame.