5 Types of Retailers that Could Be Threatened by Amazon Same-Day Delivery
The end is near! No, we're not talking about the end of the world according to the Mayan calendar. We mean the end of shirking sales tax when buying online is near, as Amazon has announced it will collect sales tax in another eight states. But while this move has proven to be unpopular with consumers, it is seemingly also strategic. Upon collecting sales tax in certain states, Amazon is also then free to set up a physical presence without additional penalty; it will thus establish a network of distribution points across the country — which could enable affordable, widespread next-day and same-day shipping. In turn, this will fundamentally change how and why we shop.
There's a lot of buzz about how this could kill brick and mortar stores selling everyday items like toothpaste and toilet paper, and how Amazon could finally find a good way to sell groceries and threaten the local supermarkets. It could be said that just about any product category with a "need it now" factor is possibly at risk of an Amazon takeover.
Today, dealnews readers buy electronics, sporting goods, apparel, and travel online with ease. Free shipping, discounts, and added incentives, plus, in many instances, no sales tax help make it appealing. But if speedy delivery and low prices (plus tax of course) on desirable products were available from Amazon, think of all the distasteful shopping experiences we could avoid. Grocery shopping is certainly a dreaded task for many folks. But it's also a rather personal task, if you think about it; consumers like to make sure they're choosing what they think "looks the best," for example. This dichotomy has inspired and limited grocery delivery services. Fresh Direct only serves the NYC area, and semi-national Peapod has suffered in its expansion from growing beyond a dozen states and 23 markets in spite of being in business for 23 years.
But offering and delivering non-perishables — home improvement, DIY projects, and oversized items — is another story. Here's our list of the five product categories from brick and mortar retailers that are most seriously at risk by Amazon same-day delivery.
1. Home Improvement
Before embarking on any improvement project, most folks do their research: tutorials and user reviews are read, advice is asked for, and prices are compared. Time consuming? Now imagine if all the recommended products you might need for a home improvement project were available from a place that also provided the tutorials, with user reviews and tips, a way to get feedback during the project, competitive or lower prices on these goods, and free delivery the very next day.
Overnight and same-day shipping could deliver a deadly blow to some home improvement retailers. Imagine avoiding the home improvement center all together! Not having to brave weekend traffic and crowded parking lots is priceless for a lot of folks. You won't need to try to find assistance or products that inevitably aren't stocked and need to be ordered anyway. And that dreaded wait in line and struggle to transport oversized items will disappear.
Home improvement chains are worried some shoppers will defect to Amazon, if given the change, but they do have some solutions in place. Case in point: 3Flat.com an online home improvement site catering to urban dwellers in Chicago. There are tutorials, shopping lists, and entire projects packaged together and delivered to your home. At first glance, 3Flat looks like a small Chicago startup... but it's really run by Lowe's.
It's a quiet effort and likely a test, as Lowe's hasn't disclosed any information about the project, but it seeks to serve shoppers who don't want to trek to the store for their home improvement needs. 3Flat intends to make home improvement project planning easy, but offerings are limited; currently 3Flat sells featured projects – a bathroom remodel or closet organization project, and shoppers can buy the entire project or just parts. Additionally, shipping is a $95 flat fee, but not all your items may come at the same time, so there's the matter of waiting and storing the ones that arrive first. 3Flat, while on the right path, falters mostly in its inelegant delivery method. And it's one that Amazon is likely to best with next-day, or same-day delivery.
2. Automotive Parts
Similar DIY enterprises could see much needed competition from Amazon once it perfects a next-day and same-day delivery service. Typically, when you need a replacement car part, you feel compelled to head over to the auto parts store, have the techs order it for you, and then you head back at a later date to pick it up. But this whole process can be simplified with Amazon's role in the auto parts market.
3. Major Appliances
A lot of shoppers, it turns out, are perfectly OK buying groceries online, but shy away from purchasing major appliances from the web. We understand this tendency to buy in-store in so far as appliance replacement often ends up being a time-sensitive need. When a refrigerator, hot water heater, or furnace breaks, there isn't a lot of time to waste waiting for your replacement to arrive. The promise of a new appliance turning up later the same day could certainly tip the scales in favor of Amazon.
4. Household Supplies
Toilet paper, soap, and laundry detergent are already hot items online at Amazon, Soap.com (owned by Amazon), and Drugstore.com. In fact, Amazon's Subscribe & Save offers some of the best deals on household items, beauty and baby goods, and pet care. But these are also the items we run out of the most, and sometimes, between large shipments, you may need an item here and there. A same-day delivery option will make for even better competition between these online merchants.
5. Video Games
Many gamers live for getting the video game they want as soon as it's released, while others still like to act on impulse "must play now" purchases. Either way, these consumers are very often heading to stores to get the title of their choice as soon as possible. The promise of games being delivered to the door before sundown should make a lot of players — as well as parents who dread taking their children to the toy store — very happy indeed.
Amazon managed to hold off collecting sales tax until it had built up the kind of retail operation that no longer needs to promote not collecting sales tax as a selling point. The new policy also opens the door to all sorts of online shopping opportunities and benefits. Readers, are there other product categories that you would be more likely to buy online if affordable same-day delivery were an option?
Front page photo credit: Content Ping
Photo credits: Carsten Knoch, Mouse Arena
Appliance Buyers Guide, Cisco Wong via Flickr, and SXC
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