Amazon will soon start offering same-day delivery to its customers, a move that could doom brick-and-mortar stores, says Barney Jopson at Britain's The Financial Times. (Amazon says it doesn't comment on "rumors and speculation.") The online giant has long enjoyed a price advantage over its physical competitors because it doesn't have to tack on state sales taxes, which can run up to $100 or more on items like laptops. The secret behind the tax dodge: Amazon's physical presence is limited to its huge warehouses, which are largely located in low-tax states. The advantage has infuriated retailers from Walmart to local mom-and-pops, and Amazon has fought legal efforts to level the playing field. But now, Amazon has agreed to start adding sales taxes in many states as part of a strategy to open up new distribution centers all over the country that can offer same-day deliveries. And "if Amazon can deliver to work or home in three or four hours," says Jopson, "then why bother with the store?" Will Amazon's same-day delivery system destroy the physical retail industry?
Yes. Retailers don't stand a chance: "Same-day delivery has long been the holy grail of internet retailers," and if Amazon can pull it off, it will "permanently alter how we shop," says Farhad Manjoo at Slate. "To put it more bluntly: Physical retailers will be hosed." Brick-and-mortar stores have been clinging to instant gratification to lure customers, but same-day delivery "offers gratification that's even more instant: Order something in the morning and get it later in the day, without doing anything else. Why would you shop anywhere else?"
"I want it today"
No. Amazon will lose its price advantage: Amazon "is taking a gamble on speed and convenience being more important to its customers than the lack of sales tax," says Heather Kelly at CNN, but a recent Citigroup survey shows that more than half of Amazon shoppers would "be less likely to buy goods on the site if they had to pay that additional amount." Furthermore, "it's unclear how the logistics of a same-day business model would work," given that the fastest delivery options from FedEx, UPS, and USPS are next day.
"Amazon to focus on same-day delivery?"
And physical stores will always exist: Amazon's reported move "certainly puts new pressure on physical stores and online rivals," says James Temple at The San Francisco Chronicle. But predictions of the physical retail industry's demise are greatly exaggerated. Brick-and-mortar stores "still account for more than 90 percent of holiday retail revenue." Some people do like to leave their home every so often. "Reliable sources inform me that some people even enjoy the act of shopping." Retail stores will be around for a long time yet.
"Amazon same-day delivery rumored"