Destroy is going a bit too far I think, but it will certainly cause Amazon to gain market share.
http://www.slate.com/articles/business/small_business/2012/07/amazon_same_day_delivery_how_the_e_commerce_giant_will_destroy_local_retail_.html
Quote
I Want It Today
How Amazon's ambitious new push for same-day delivery will destroy local retail.
By Farhad Manjoo|Posted Wednesday, July 11, 2012, at 5:53 PM ET
Amazon has long enjoyed an unbeatable price advantage over its physical rivals. When I buy a $1,000 laptop from Wal-Mart, the company is required to collect local sales tax from me, so I pay almost $1,100 at checkout. In most states, Amazon is exempt from that rule. According to a 1992 Supreme Court ruling, only firms with a physical presence in a state are required to collect taxes from residents. Technically, when I buy a $1,000 laptop from Amazon, I'm supposed to pay a $100 "use tax" when I file my annual return with my home state of California. But nobody does that. For most people, then, most items at Amazon are significantly cheaper than the same, identically priced items at other stores.
In response to pressure from local businesses, many states have passed laws that aim to force Amazon to collect sales taxes (the laws do so by broadening what it means for a company to have a physical presence in the state). Amazon hasn't taken kindly to these efforts. It has filed numerous legal challenges, and fired all of its marketing affiliates in Colorado, North Carolina, Rhode Island, and California. It also launched a $5 million political campaign to get voters to turn back the California law. And when Texas' comptroller presented Amazon with a $269 million sales tax bill last year, the company shut down its distribution center in Dallas.
But suddenly, Amazon has stopped fighting the sales-tax war. Last fall it dropped its repeal campaign in California and instead signed a deal with lawmakers to begin collecting sales taxes later this year. That was followed by several more tax deals—over the course of the next couple years, Amazon will begin collecting sales tax from residents of Nevada, New Jersey, Indiana, Tennessee, Virginia, and on July 1, it began collecting taxes from Texans. It also currently collects taxes from residents of Kansas, Kentucky, New York, North Dakota, and its home state of Washington. After all the tax deals go into effect, the company will be collecting taxes from the majority of its American customers.
Why would Amazon give up its precious tax advantage? This week, as part of an excellent investigative series on the firm, the Financial Times' Barney Jopson reports that Amazon's tax capitulation is part of a major shift in the company's operations. Amazon's grand strategy has been to set up distribution centers in faraway, low-cost states and then ship stuff to people in more populous, high-cost states. When I order stuff from Amazon, for instance, it gets shipped to California from one of the company's massive warehouses in Kentucky or Nevada.
But now Amazon has a new game. Now that it has agreed to collect sales taxes, the company can legally set up warehouses right inside some of the largest metropolitan areas in the nation. Why would it want to do that? Because Amazon's new goal is to get stuff to you immediately—as soon as a few hours after you hit Buy. (Disclosure: Slate participates in Amazon Associates, an "affiliate" advertising plan that rewards websites for sending customers to the online store. This means that if you click on an Amazon link from Slate—including a link in this story—and you end up buying something, Amazon will send Slate a percentage of your final purchase price.)
It's hard to overstate how thoroughly this move will shake up the retail industry. Same-day delivery has long been the holy grail of Internet retailers, something that dozens of startups have tried and failed to accomplish. (Remember Kozmo.com?) But Amazon is investing billions to make next-day delivery standard, and same-day delivery an option for lots of customers. If it can pull that off, the company will permanently alter how we shop. To put it more bluntly: Physical retailers will be hosed.
Can Amazon pull it off? It's sure spending a lot of money to try, and it has already come up with a few creative ways to speed up deliveries. In each of the deals it has signed with states, the company has promised to build at least one—and sometimes many—new local warehouses. Some of these facilities are very close to huge swaths of the population. Amazon is investing $130 million in new facilities in New Jersey that will bring it into the backyard of New York City; another $135 million to build two centers in Virginia that will allow it to service much of the mid-Atlantic; $200 million in Texas; and more than $150 million in Tennessee and $150 million in Indiana to serve the middle of the country. Its plans for California are the grandest of all. This year, Amazon will open two huge distribution centers near Los Angeles and the San Francisco Bay Area, and over the next three years it might open as many as 10 more in the state. In total, Amazon will spend $500 million and hire 10,000 people at its new California warehouses.
But Amazon isn't simply opening up a lot of new shipping centers. It's also investing in making those centers much more efficient. Earlier this year, it purchased Kiva Systems, a company that makes cute, amazingly productive "picking robots" that improve shipping times while reducing errors. Another effort will allow the company to get stuff to you even faster. In Seattle, New York, and the United Kingdom, the firm has set up automated "lockers" in drug stores and convenience stores. If you order something from Amazon and you work near one of these lockers, the company will offer to drop off your item there. On your way home from work, you can just stop by Rite Aid, punch in a security code, and get your stuff.
All these efforts seem to be paying off. I'm a frequent Amazon shopper, and over the last few months I've noticed a significant improvement in its shipping times. As a subscriber to Amazon's Prime subscription service, I'm used to getting two-day shipping on most items for free. But on about a third of my purchases, my package arrives after just one day for no extra charge. Sometimes the service is so speedy it seems almost magical. One Friday afternoon last month, I ordered three smoke alarms, and I debated paying extra for shipping so that I could install them over the weekend. The $9 per item that Amazon charges for Saturday delivery seemed too steep, though, so I went with standard two-day service. The next morning, the delivery guy arrived with my smoke detectors. I'd gotten next-day Saturday service for free. I have no idea how Amazon made any money on my order (the whole bill was less than $30) but several people on Twitter told me that they've experienced similarly delightful service.
If Amazon can send me stuff overnight for free without a distribution center nearby, it's not hard to guess what it can do once it has lots of warehouses within driving distance of my house. Instead of surprising me by getting something to me the next day, I suspect that, over the next few years, next-day service will become its default shipping method on most of its items. Meanwhile it will offer same-day service as a cheap upgrade. For $5 extra, you can have that laptop waiting for you when you get home from work. Wouldn't you take that deal?
I bet you would. Physical retailers have long argued that once Amazon plays fairly on taxes, the company wouldn't look like such a great deal to most consumers. If prices were equal, you'd always go with the "instant gratification" of shopping in the real world. The trouble with that argument is that shopping offline isn't really "instant"—it takes time to get in the car, go to the store, find what you want, stand in line, and drive back home. Getting something shipped to your house 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 ever shop anywhere else?
http://www.youtube.com/watch?v=EZ15vUjgqvw
Next day delivery is wonderful. I finally realised why my stuff comes so darn cheap the last time I put an order in- they've a distribution centre in the town next door.
Still...call me a luddite but...the decline of the high street is a major issue. The better internet shopping gets the more dire the high street's situation gets.
QuoteAnother effort will allow the company to get stuff to you even faster. In Seattle, New York, and the United Kingdom, the firm has set up automated "lockers" in drug stores and convenience stores. If you order something from Amazon and you work near one of these lockers, the company will offer to drop off your item there. On your way home from work, you can just stop by Rite Aid, punch in a security code, and get your stuff.
Why do you need a special locker? (incidentally I neer saw one in England). In Japan they just ship it to convenience stores and you pay and pick it up there.
Quote from: Tyr on July 13, 2012, 02:53:18 AM
Still...call me a luddite but...the decline of the high street is a major issue. The better internet shopping gets the more dire the high street's situation gets.
http://www.youtube.com/watch?v=EZ15vUjgqvw
You've just posted the same link again.
I already do my grocery shopping online, and I already get them on the same day. It isn't going to destroy retail.
Quote from: Tyr on July 13, 2012, 03:09:49 AM
You've just posted the same link again.
yes because it fits the point :P
Change in market conditions should not scare anyone, as it is the benefit for everyone, even if there are short term disadvantages involved for some people.
Quote from: Tamas on July 13, 2012, 03:16:18 AM
Quote from: Tyr on July 13, 2012, 03:09:49 AM
You've just posted the same link again.
yes because it fits the point :P
Change in market conditions should not scare anyone, as it is the benefit for everyone, even if there are short term disadvantages involved for some people.
This is not the case however.
For customers from purely a shopping POV it is quite universally a good thing.
But consider- less people will need to be employed in retail and the death of a town centre has much worse effects than there merely being nowhere to go shopping there anymore. The high street is about more than shops, its the heart of a community, lots of cafes and bars and other places there too. It is the main street of the town and used by everyone in some way. It has a big impact on the community.
Its a complicated issue.
Quote from: Tyr on July 13, 2012, 03:19:36 AM
This is not the case however.
For customers from purely a shopping POV it is quite universally a good thing.
But consider- less people will need to be employed in retail and the death of a town centre has much worse effects than there merely being nowhere to go shopping there anymore. The high street is about more than shops, its the heart of a community, lots of cafes and bars and other places there too. It is the main street of the town and used by everyone in some way. It has a big impact on the community.
Its a complicated issue.
Delivery systems employ people too. You need people to work in the warehouses, to drive the stuff around, and to deliver the goods.
Also, I fail to see how you can prevent Amazon from doing this. It doesn't involve a complex decision. It is going to happen.
cafes and bars will remain. Or change.
This has been an ongoing process for millenias now, and we end up being all the better by it. for example, you don't have to go to the shoemaker guy down the street to get your shoes anymore, yet the community survived.
Of course the businesses badly affected by this will cry but you should not subscribe to their doom an gloom visions over this.
Plus what Mono said.
Quote from: Monoriu on July 13, 2012, 03:14:56 AM
I already do my grocery shopping online, and I already get them on the same day. It isn't going to destroy retail.
Me too.
Quotecafes and bars will remain. Or change.
This has been an ongoing process for millenias now, and we end up being all the better by it. for example, you don't have to go to the shoemaker guy down the street to get your shoes anymore, yet the community survived.
Of course the businesses badly affected by this will cry but you should not subscribe to their doom an gloom visions over this.
.
That was different. That was the death of one or two shops on the high street, with plentiful other physical shops cropping up to replace them.
Here we're talking about a complete and total revolution in the system. The very notion of the high street being wiped out unless some solution can be thought up (I've no idea what one could be)
Will cafes and bars survive? Amidst a shuttered up street where nobody wants to go a lonely cafe will still be able to get business?
I can certainly see a place for streets that are nothing but the night time economy (such places already exist) but for the daytime...its hard to see how they can survive.
Quote from: Monoriu on July 13, 2012, 03:25:43 AM
Delivery systems employ people too. You need people to work in the warehouses, to drive the stuff around, and to deliver the goods.
Not as many as shops employ. See the part in the article about warehouse robots too...
Quote
Also, I fail to see how you can prevent Amazon from doing this. It doesn't involve a complex decision. It is going to happen.
Never said we could/we should and it wouldn't.
QuoteI already do my grocery shopping online, and I already get them on the same day. It isn't going to destroy retail.
Because a lot of people have yet to get wise to this even being possible.
Give it a few decades though....
The more and more people will switch to online shopping, the more and more people online retailers will employ. Storage clerks, customer support, administration, IT, software developers, service management, couriers...
Hey, you never know. If there are fewer shops out there selling commodities, rent for retail space may go down. This may encourage more retail shops that sell personal services and high-end products to enter the market.
Quote from: Tamas on July 13, 2012, 03:48:26 AM
The more and more people will switch to online shopping, the more and more people online retailers will employ. Storage clerks, customer support, administration, IT, software developers, service management, couriers...
I'm skeptical that the numbers would offset the losses of the brick & mortar stores.
QuoteThe more and more people will switch to online shopping, the more and more people online retailers will employ. Storage clerks, customer support, administration, IT, software developers, service management, couriers..
And the less and less physical retailers will employ. A lot more people will lose jobs than will gain them. And thats not even the main issue at stake.
Quote from: Monoriu on July 13, 2012, 03:52:59 AM
Hey, you never know. If there are fewer shops out there selling commodities, rent for retail space may go down. This may encourage more retail shops that sell personal services and high-end products to enter the market.
Possibly.
I suspect in my current city they have recently dropped the rents pretty low to compete with the results of their retarded lack of urban planning laws since the government dropped its retail space law a decade ago (this basically resulted in this city being the strangest thing on Earth, most of the shops are scattered far and wide along the main roads away from the city rather than in the city centre or in a few places outside of the centre)
In my home town however they refuse to recognise the writing on the wall and keep rents pretty high.
I buy commodities, like pre-packaged milk or detergent online. But if I want to buy a camera or TV I still want to try it out before I pay. Online shopping can't replace restaurants and Starbucks. I still want to buy a lot of niche products that can't be found in online shops. I still buy Japanese peaches from a physical location. My wife still wants to examine each pack of vegetables she buys. There is no way this change destroys local retail. Change the landscape a bit, perhaps.
Quote from: Peter Wiggin on July 13, 2012, 03:57:45 AM
Quote from: Tamas on July 13, 2012, 03:48:26 AM
The more and more people will switch to online shopping, the more and more people online retailers will employ. Storage clerks, customer support, administration, IT, software developers, service management, couriers...
I'm skeptical that the numbers would offset the losses of the brick & mortar stores.
http://www.youtube.com/watch?v=EZ15vUjgqvw
Funny video, but not really worth posting three times.
Quote from: Peter Wiggin on July 13, 2012, 04:46:15 AM
Funny video, but not really worth posting three times.
that's the easiest way to remind the people here of the point I am trying to make.
Change is inevitable, yes. But it's not often pleasant and even when it is some aspects might be unfortunate. One side effect of the information revolution is that with all these super-efficient businesses running around, "full" employment is likely a pipe dream, barring massive government make-work programs.
Quote from: Peter Wiggin on July 13, 2012, 05:10:13 AM
Change is inevitable, yes. But it's not often pleasant and even when it is some aspects might be unfortunate. One side effect of the information revolution is that with all these super-efficient businesses running around, "full" employment is likely a pipe dream, barring massive government make-work programs.
Tamas doesn't care. As long as there are a couple hundred million Slavs in need of Borscht he'll have a job.
Should be interesting how Amazon will do same-day delivery with no fucking US Postal Service.
Quote from: Tyr on July 13, 2012, 03:57:51 AM
I suspect in my current city they have recently dropped the rents pretty low to compete with the results of their retarded lack of urban planning laws since the government dropped its retail space law a decade ago (this basically resulted in this city being the strangest thing on Earth, most of the shops are scattered far and wide along the main roads away from the city rather than in the city centre or in a few places outside of the centre)
That's actually pretty common in newer cities with room to expand.
At any rate, the death of town centres isn't a bad thing. This is the 21st century. There's no such thing as a community anymore.
Quote from: Monoriu on July 13, 2012, 04:08:33 AM
Online shopping can't replace restaurants and Starbucks.
Ordering in?
Quote from: CountDeMoney on July 13, 2012, 06:50:08 AM
Should be interesting how Amazon will do same-day delivery with no fucking US Postal Service.
I'm sure there are other couriers, even in the US.
Quote from: CountDeMoney on July 13, 2012, 06:50:08 AM
Should be interesting how Amazon will do same-day delivery with no fucking US Postal Service.
:huh: It would be even more interesting to see how Amazon would do same-day delivery *with* a fucking US Postal Service.
Quote from: CountDeMoney on July 13, 2012, 06:50:08 AM
Should be interesting how Amazon will do same-day delivery with no fucking US Postal Service.
Hopefully, Amazon will simply replace the USPS and do all the delivery themselves.
Quote from: Admiral Yi on July 13, 2012, 02:52:53 PM
Quote from: CountDeMoney on July 13, 2012, 06:50:08 AM
Should be interesting how Amazon will do same-day delivery with no fucking US Postal Service.
:huh: It would be even more interesting to see how Amazon would do same-day delivery *with* a fucking US Postal Service.
They still cover more than FedEx or UPS. Although FedEx and UPS are more capable with Adjacent Business services.
Quote from: Neil on July 13, 2012, 07:53:42 AMThere's no such thing as a community anymore.
There absolutely is, and there are a few kinds; the communities of people who can afford to pay extra to live in a place that is a community; the communities of those on the economic margins, too poor to access the services that render communities less necessary; and communities of people who are far from the reaches of the technologies that render communities less necessary.
If Amazon is successful, communities will be destroyed - especially in places where community exists because it's the only real choice. But community will still exist for those too poor to access Amazons and amongst those who are willing and able to pay the premium to live in one.
Quote from: Neil on July 13, 2012, 07:53:42 AM
There's no such thing as a community anymore.
There are. They're just not geographically based. They're called social network clusters these days.
Quote from: Jacob on July 13, 2012, 03:42:34 PM
Quote from: Neil on July 13, 2012, 07:53:42 AMThere's no such thing as a community anymore.
There absolutely is, and there are a few kinds; the communities of people who can afford to pay extra to live in a place that is a community; the communities of those on the economic margins, too poor to access the services that render communities less necessary; and communities of people who are far from the reaches of the technologies that render communities less necessary.
If Amazon is successful, communities will be destroyed - especially in places where community exists because it's the only real choice. But community will still exist for those too poor to access Amazons and amongst those who are willing and able to pay the premium to live in one.
Interesting.
As it happened I went to somewhere a couple of weeks ago, a small rural village, and they definitely did community in a big or at least to an atypical degree, but I got the distinct impression you had be be from a rather high social class in order to participate. :bowler:
You'd certainly need to be a millionaire to be able to move into the village now.
If local retail isn't dead already, it never will be.
There's enough firepower between Wal-Mart and Tesco, Amazon and Zappos and all the rest to have "killed" it a few times over by now.
Quote from: Monoriu on July 13, 2012, 04:08:33 AM
I buy commodities, like pre-packaged milk or detergent online. But if I want to buy a camera or TV I still want to try it out before I pay. Online shopping can't replace restaurants and Starbucks. I still want to buy a lot of niche products that can't be found in online shops. I still buy Japanese peaches from a physical location. My wife still wants to examine each pack of vegetables she buys. There is no way this change destroys local retail. Change the landscape a bit, perhaps.
Yeah, there are some things I can't see myself ever buying online.
Quote from: MadImmortalMan on July 13, 2012, 07:58:36 PM
If local retail isn't dead already, it never will be.
There's enough firepower between Wal-Mart and Tesco, Amazon and Zappos and all the rest to have "killed" it a few times over by now.
Supermarkets and shopping malls didn't kill it but its certainly on the ropes thanks to them. Online shopping could be the killing blow.
Even if things don't change and online shopping doesn't get better and more efficient, as things stand the simple aging of the population and ever increasing percentage of the population who is tech savvy should be enough to wreck serious damage.
Already this is working - HMV in the UK is in huge trouble due to online retail. And since HMVs are normally huge anchor stores, it going under could have dodgy effects.
There is no reason to sell commodity type goods in expensive locations and labour-intensive stores. Which is why there is no use kicking against the pricks and trying to slow down the process with pointless legislation or costly subsidies. Plus, as others have pointed out, it is a beneficial process that will destroy millions of pointless jobs.
The High Street is already a dispiriting and tedious experience, all those pointless chain stores selling goods at higher prices than they can be bought online. If the town centre/high street is to have any future, IMO, it needs to evolve. I imagine a mix of cafes, restaurants and shops with a personal touch and staff that actually have useful information to convey. The days of retailers charging massive mark-ups for indifferent and uninformed service are over, three cheers for that :cool:
Quote from: MadImmortalMan on July 13, 2012, 07:58:36 PM
If local retail isn't dead already, it never will be.
There's enough firepower between Wal-Mart and Tesco, Amazon and Zappos and all the rest to have "killed" it a few times over by now.
For every town that had its downtown decimated by Wally World, there is another who had kept it going.
For examples, see Centerville and Waynesville Ohio. Centerville is splotched right in the middle of suburban sprawl and kept its downtown going. Waynesville found its niche selling itself as a small town shopping place. In contrast, my old hometown of Fairborn let its downtown atophy into shit you don't want to shop at.
Shitty city councils are a problem. Having spoke in front of a few, most of those tards shouldn't have elected turd wrangler, let alone in a position of power.