Amazon: Will Its Brick and Mortar Ambitions Succeed?
September 19, 2018
I read “The CEO of Macy’s Says It’s Harder for an E-commerce Giant to Conquer Offline Retail Than the Other Way Around.” The main idea is that Amazon will fail if it pushes forward with more book stores, more grocery stores, and more traditional retail store fronts. I learned in this allegedly accurate statement by Macy’s CEO, Jeff Gennette:
I think it’s more difficult for an internet star to go into brick and mortar than the other way around.
My research team has been chasing down information about Amazon’s policeware initiative. On that research path, we have noticed one aspect of Amazon’s approach to traditional store fronts; that is, Amazon first decimates traditional businesses and then selectively moves in. The examples which point to the future include Amazon book stores in Denver.
Amazon also is using a “buy and price cut” approach in its grocery business. One of my researchers wondered if the grocery delivery play was a way for Amazon to sucker outfits like Kroger into spending cash for a service which is ultimately a money pit. Time will tell.
A company like Macy’s may find itself in the same boat with JCPenny’s, Sears, and other old style retain businesses. Macy’s, for example, may struggle to match what might be called predatory pricing, bundling, ad hoc discounts on house brands and brand name products, and other sales techniques like “bought with” nudges used by the absolutely happy Amazon work force.
Perhaps Mr. Gennette is correct? His role at the company demands that he remain confident that he can take steps to keep Macy’s a bigly retail force. On the other hand, I wonder if anyone in his family uses Amazon?
Stephen E Arnold, September 19, 2018
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