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Originally Posted by fjtorres
I'm not saying they will be cherry picking forever. But as a ramp up strategy, building up their B&M presence and Prime subscriber base off affluent customers is an effective (and profitable) way to grow their footprint.
Online isn't going to be just 10% forever so over-investing in B&M because it is 90% today isn't a good long term strategy. Maximizing presence isn't the only strategy to success. Remember that the so-called retail apocalypse isn't about online as much as it is about over-expansion. Most of the roadkill died because they had more outlets than the market will bear. Amazon's B&M footprint will probably end up closer to Apple's than Walmart or Radio Shack's.
Also, don't forget there is more to Amazon than retail.
There are more profitable businesses to invest in than retail. I was only half joking about Tesla. Home automation is one area Amazon is targeting that can deliver much bigger profits than retail.
For all we know those stores are meant to be self-sustaining showrooms for future product lines, with books and gifts just traffic generators.
Like I said, they're tricky and their moves aren't always what they appear to be. Think of the Echo introduction and what it turned out to be: a trojan horse to backdoor into home automation. And home automation might be a backdoor for home robotics.
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I can see the Amazon B&M stores being a logical offshoot of their same day delivery business. Apple is already experimenting with same day delivery from their various stores. I purchased an iPad Pro last spring on line from my local Apple store and had it delivered that afternoon. Really handy when I'm working from home.
A lot of people like the shopping experience. While Amazon's niche is online ordering, I can see them being quite successful with a B&M store, with stores like Whole Food, they can leverage a lot of expertise, assuming the bean counters don't mess up the shopping experience by trying to squeeze the pennies. I went by Whole Food last weekend to pick up some food for the family cookout. Nice experience and the guy running the cash register pointed out that since I was a prime member, I could save some money. People joke about calling Whole Food, Whole Paycheck, but Whole Food gets the customer experience idea. They have people who act like they want to be there. That's why the parking lot is usually crowded and the stores are packed.
I don't see them successfully competing using the Walmart or Dollar Store model.