Why Amazon Feels Threatened By Brick and Mortar Retail Stores

Amazon Webstore Closing Is Latest Sign Of The Challenges Amazon Faces From Smaller Retailers

In true David and Goliath fashion, brick and mortar retail stores have turned Amazon on its head thanks in large part to the ability of small businesses to have an omnichannel presence.

3 Signs Amazon Is Feeling Threatened By Smaller Retailers

1. The number of distribution centers being built
In light of the order online and pick up in store option local retailers have with an omnichannel presence, Amazon is trying to compete by strategically placing distribution centers nearby to speed up delivery times.

2. Drone testing and same day delivery promises
Amazon wants so badly to be able to use drones to deliver an order within hours of it being placed online. The processes and practices of such a system are both costly and time consuming. It’s all being done in an effort to replicate the immediacy of shopping in a brick and mortar retail store.

3. Amazon Webstore closing
With the closing of the Webstore, Amazon is showing its hand a bit. They obviously don’t feel they are achieving an adequate return on their investment.

As technology has advanced, it’s become easier for retail stores to manage their own websites and online stores. The necessary technology becomes increasingly user friendly, setting up retailers to work independently of ecommerce platforms like Amazon Webstore.

Consumers Seem To Prefer An In-Store Experience
Consumers like the option of picking up online orders. It meets their desire for instant gratification, but it also provides other benefits Amazon can’t match. When a consumer walks into a retail store, they’re able to match specific colors, to try on merchandise, to see the actual size, and to hold it in their hands. Amazon is not as nimble as small business retailers, and Amazon cannot provide a five-senses experience.

Generally speaking, if a consumer searches Amazon for a product, they are planning to have the product shipped. If they search Google, Yahoo!, or Bing, they’re trying to find the same product locally. This is where small businesses can capitalize on local marketplace possibilities. There’s a power to buying local. Taxes stay in the community and the carbon footprint associated with shipping is reduced. Additionally, there’s the intangible benefit of feeling like the local business owner is a neighbor you support.

The ecommerce challenge for small business retailers is to have a high quality online store and web presence in addition to providing a unique in-store experience. By integrating the channels, retailers are able to synchronize inventory management and POS software. This is the type of technology that has Amazon on its heels.

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