In a report on why Amazon’s prospects for the future “[depend] on moving from the internet to the physical world,” Nick Statt at the Verge shared his take on how the company has been taking in the brick and mortar retail space. According to Statt, the new retail push is not just a new venture, but a necessity for Amazon.
“The future of Amazon is starting to look a lot more complicated than just selling products on the internet. One of the company’s cashier-less Go convenience stores opened in San Francisco last week, with another store opening in the city later this year and more planned for Chicago and New York City in 2019. Coupled with Amazon’s purchase of Whole Foods last year, these Go stores give us a glimpse into a future hybrid form of retail that Amazon could use to expand from e-commerce into real-world purchases at restaurants, grocery stores, and elsewhere.”
Apple is not the only trillion-dollar company that might have to fundamentally change its business model going forward. As Statt observed, Amazon will have to transition from the “everything” store to the “do everything” store.
The reason, per Statt, is that Amazon is already selling everything it can online. But some things are not conducive for online sales, as Amazon competes with Walmart. But nearly half of Walmart’s sales are groceries, where Amazon has almost no presence. If Amazon is to substantially increase their sales, they are going to have to figure out a way to enter that space. This could justify their previous purchase of Whole Foods.
There is also the matter of restaurants and products that you would usually buy at a drug store. It would not be surprising to see Amazon purchase, or at least form a partnership with a major pharmacy. While they sell shoes and apparel, most people like to see how clothing items actually look like in person. The feel of the fabric can never be adequately described with text, and there is much more to fit than the number on the label.
In the meantime, Walmart is not sitting still. It is easier for Walmart to become Amazon than for Amazon to become Walmart. Right now, Walmart is already a major online retailer. They are also expanding their delivery options in major markets. In some stores, you can do your shopping online and go pick it up at your convenience. On the other end of the order, someone has already gathered the items for you.
Walmart is even aping Amazon’s real-world retail efforts by opening cashier-less stores of their own. The biggest problem with Amazon’s business model is that no part of it is impossible for another big player to duplicate. As the other trillion-dollar tech company, Amazon has to find a way to continue growth. And that is most likely going to have to be from something other than online sales.