Friday, December 11, 2015

Amazon Prime Now and the Rise of Community-Building Retailers

Amazon Prime Now has debuted in Nashville. Amazon Prime Now offers free two-hour delivery on many items for Prime members. The service is amazing and is already changing the way I shop. I really dislike shopping malls, especially during the busy holiday season, but I also dislike waiting weeks (or even days) for shipments to arrive, so Amazon Prime Now is a perfect solution.

With Amazon Prime Now expanding, I imagine even more brick and mortar retailers will be headed to bankruptcy unless they find a way to differentiate their companies and add more value.

Brick and mortar retailers may find differentiation through community building services. I already see some retailers attempting this. Running footwear and apparel stores are offering free group runs starting from their storefronts and/or group training programs for a fee. Grocery stores are offering group cooking classes. Book stores are offering book clubs. The list goes on.

These brick and mortar retailers are finding it more and more difficult to compete with e-retailers on price and convenience. With the rise in technology, however, face to face community seems to be increasingly rare. Brick and mortar retailers that aid in community building may be able to justify higher prices for their goods, and the fee-based training programs may add another solid revenue stream.

Similarly, in my classes, I consistently ask myself: How am I providing value beyond what students could receive from an online course? I have made changes (like more group work, more case method work, more writing-based assessments, and more face to face advising) in response to this question, and I continue to look for ways to improve. Adapt or die.

Bankruptcy/Reorganizations, Business School, Entrepreneurship, Haskell Murray, Law School, Web/Tech | Permalink


I think brick and mortar have one enticement - - the ability to tangibly assess the product. I can't imagine trying to order a suit, select a tie or match a shirt simply by online visual comparison.

But, you make a great point. I needed a laser cartridge for my printer. Went to both Staples and Office Depot. Neither had one in stock. Hedging myself, I ordered online from Office Depot but it prompted me to check Amazon. I did and found that the online order from Amazon was MORE THAN 50% less than Office Depot. So, I ordered one and plan to return the cartridge to Office Depot for credit.

Posted by: Tom N. | Dec 11, 2015 9:19:43 AM

True, Tom. But many of the brick and mortar stores are now doubling as showrooms for Amazon and other e-retailers. I can try a piece of clothing, on or check out some other item, in the store and then order it for less on Amazon or another e-retailer. And with Amazon Prime Now, the item will arrive shortly after I get home.

Posted by: Haskell Murray | Dec 11, 2015 9:26:10 AM

Some online retailers--e.g. Warby Parker--will send you an array of their physical products (here, eyeglass frames) for you to try on.

Posted by: Matthew Bruckner | Dec 17, 2015 1:07:33 PM

Good point, Matthew. One of the main things that makes Amazon great, in my opinion, is their easy return policy.

Posted by: Haskell Murray | Dec 17, 2015 1:14:51 PM

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