Why Amazon And Retailers Can Both Win In 2018
On the eve of when most retailers will report their year-end results and wrap up a fiscal year that was marked with more than 7,000 store closings and with a drastic shift of buying to internet providers, it is appropriate to review the opportunities and challenges they face. There are many opportunities for traditional retailers to regain momentum in the coming year, even as the large shadow of Amazon hovers over the whole industry. They just have to step up. One has to realize that much of the revenue Amazon generates comes directly from brick and mortar vendors. Retailers were asleep at the wheel; it was the lack of invention or innovation by traditional stores that allowed Amazon to enter so many businesses. Today, Amazon has $175 billion in sales and is gearing up for even higher numbers. It expects more sales with food and with new technology ideas such as Amazon Go, and a bigger push into Amazon Plants and Amazon Books – all will be found in physical stores throughout the United States. I think that Amazon’s management now realizes that some merchandise should have a store presence. But, fundamentally, Amazon is really not a retailer. It is a superb technology company that has mastered how to sell everything cheaper and quicker on the internet. That expertise will help Amazon grow in many areas, especially food and commodities. But, I believe it is harder to translate that approach and be successful in fashion, since many customers want to try a garment for fit and feel the fabric for comfort. It is likely that Amazon’s apparel offerings will not be nearly as successful. While they are looking to physical stores for some products (Amazon Go, etc.), they seem to miss the point when the customer often still has a desire to shop for style and trends. The returns could be awful and very costly. And, it probably will make the classifications unprofitable. Read more at Forbes.
