There are financial blogs which pay people to make pretty pretty graphs without providing any real information, and then there are blog posts which have actual information. You can either have pretty pretty graphs with no information or you have to read.
Years ago I said Amazon.com was entering its final stages and now others are finally agreeing with me. Take a good look at Sears. You remember Sears don’t you. The company which invented the mail order catalog business or at least was the first to take it to a massive scale. A company which continued to bring in pathetic excuses for management whizing their money away on things like The Sears Tower and Prodigy. You know, the company which then went bankrupt at the catalog portion of their business while others thrived with mail order.
Sears is today where Amazon.com will be in less than five years. Yes, it took Sears decades to devolve into a ghostly image of what it once was, but Amazon’s demise will happen at Internet speed. It has not choice, it is only Internet. Finally other analysts are starting to say the same thing.
That article does lack a bit of IT knowledge, but it has the major points correct. It’s not that brick & mortar retailers finally got their software correct, though. It has a lot more to do with the fact physical retailers can purchase complete and customizable eCommerce software packages from tiny companies like IBM and Oracle. Then they just have to turn on those feature consumers want such as “free ship to store” so they can do the one thing Amazon.com can’t do on a bet. Get the add-on sales due to impulse/convenience purchasing consumers do while at the store to pick up their order. Oh come on, you’ve all done it. You go into one place to pick something up then remember you need/want something else which this store happens to carry, OR you are at the counter with your item and see the check-out counter display.
Contrary to popular belief, Amazon.com isn’t Barnes & Noble’s problem. Lack of foot traffic is Barnes & Noble’s problem. Web wise bn.com has a pretty good presence. The real problem is the lack of foot traffic in the stores. Culturally, not that many people “spend the day at a book store” anymore. I have said this many times and will say it again. Barnes & Noble needs to get into the DVD by mail rental business allowing in-store exchanges just like Block Buster did. Block Buster could not make it work for many reasons, the two biggest were management and one-trick-pony. Barnes & Noble doesn’t need that portion of the business to be directly profitable. It just needs to sell the people other things when they come into the store to exchange a movie on a rainy weekend. After a couple of months/years, it will become habit for the customers to “think of going to Barnes & Noble.” That thought doesn’t happen much any more.
I’m old enough to remember when AOL and Prodigy were busy mailing more floppies in a given year that their were people on the planet. Heck floppy sales plummeted at the consumer level because people kept finding ways of removing the protection and formatting those floppy disks. Not everyone who got the disks own a computer so they would bring them in for their co-workers. Sigh, then AOL started sending CDs out and the magnetic media recycling frenzy ended.
How many of you know that at one point in time you could actually buy a house via the Sears catalog. I remember hearing those stories as a kid. You could actually order a house and every thing to assemble it (sans the tools) would show up at the shipping address. Yes, some assembly was required and yes, they came with assembly instructions. If memory serves me correctly it wasn’t just a pile of boards and singles but was a bit less than the trailer/modular homes you see today. It was some level of prefab in between.
I don’t tell you the “order a house” story to prove just how close I am to the great check-out counter of life, but to educate you whipersnappers about just how large and pervasive Sears was at the time. _Everybody_ knew Sears. Most bought at least some things there. Only people with computers and/or dumb phones know about Amazon.com or at least purchase from there. Yes Virginia, there is still a large segment of American consumers who have neither a computer at home nor a dumb phone. Some cannot afford them, but, most of that segment simply don’t want them. As much as I hate Wal-mart I have to admit, even they have figured this out. How do I know that? Take a really good look at all of the ads they run for basic cell phones with big buttons and no texting/Internet capability. That segment of consumers watches television but does not shop on-line nor do they stream movies.
One final note about Barnes & Noble here. In order to get that most cherished of market segments to do the DVD rental by mail with in-store exchanges, they need to have terminals either in the rental area or in the coffee area where customers can browse the main movie selection and update their list. Come on, you will sell them coffee and something to munch on while they are doing it. They might even see someone reading a book and purchase one on their way out.
No people, Amazon.com has hit the rocking chair of their existence. Unlike Sears, they won’t have lengthy “golden years.” Not that many people have “golden years” which are golden. We tend to look back at life in our 20s-30s as that time.