Bylery’s charges $4.95 to let you order online, then drive to one of their stores to pick up your order. Or, they’ll deliver your order for $9.95. Coborns charges $5 for delivery if you order $50 or more, or $9.95 if you order less than $50 of stuff. You can pick up for free at their warehouse in New Hope.You can pretty much buy anything on Amazon these days and the key is that they are miles ahead of their competition in order fulfillment. Kohler:
Amazon, on the other hand, shipped Cheerios to my house from Kentucky with no shipping charges, and for $1 less per box.
Until recently, big box stores, including now-struggling electronics stores and now-struggling grocery chains, were able to compete largely based on pricing power. They were good at moving products around the country and putting them on shelves, but it turns out that some companies are better at that key part of that type of business. For example, WalMart and Target are darn good at efficiently moving products from all over the world to store shelves where they rely upon customers to spend their own time and money coming to their stores to purchase items.
The next generation move in retail is to win the last mile. If Amazon can get the same product to my door at the same price or less than what Best Buy, SuperValu, WalMart or Target charges, why would I waste my time and money driving to their stores, navigating through ugly parking lots, finding products in a store that I can find online in seconds, then waiting in line to purchase them?
It's an excellent question and one that these companies spend a lot of time trying to answer. There's more at the link and it's definitely worth your time.
6 comments:
I wandered into a Best Buy for the first time in a long while a few weeks back (my wireless router had died, and I really couldn't wait for delivery). Yeah, that place is toast. It was a ghost town on a Sunday afternoon. If it still exists this time next year, I'll be shocked.
What makes this interesting is at about 6 miles north of downtown Seattle, it is the only consumer electronics retailer anywhere near the (densely populated) city center. The only real brick and mortar competition is the Target next door.
Target is opening a store downtown, right next to Pike Place. It will be the only retailer of its kind in the area. I bet it's closed in three years.
I went into my Best Buy store on Saturday afternoon, and it was sead as well. I'm in ther every so often and I've never seen it like that. Is it a "blood in the water" effect where the bad news keeps folks away? I men, the news hasn't changed their commodity pricing. I may be reluctant to buy a big ticket item from them, but otherwise I'd be fine with going there.
As for groceries, having non-perishables delivered more affordably sounds good, but I want to see my meat and produce when I buy it.
i used to love best buy. it was browser place for me. i'd walk in intending to just look, and end with 75-100 bucks worth of cd's or dvd's i didnt know were out there.
its bad there now. its music and video collection has been eliminated (largely).
i no longer have a reason to go, unless i'm looking for a dryer (like, recently).
its still my prefered place for electronics, but not sure for how much longer.
I see to recall reading that Best Buy's business model was essentially that their margins on big ticket items are paper thin (which makes sense, because generally the prices of TVs, stereos, computers, etc. are more or less identical at Target, Wal-Mart, and (formerly) Circuit City), but they mark items like cables way the hell up to make up for it, counting on people coming into the store to buy the big stuff to opt for convenience/familiarity when they get necessary accessories.
(I imagine they used to make a lot of money on CDs and DVDs, too, but nobody makes money on that anymore.)
The reason I hadn't been to BB in so long is that I had discovered the price of cables and such on Amazon is typically 25% of what I'd pay at BB. I assume everyone else has figured this out as well.
I guess it's bad news for low to middle income employment, but I think a landscape with fewer shopping malls and giant parking lots doesn't sound so terrible to me.
I see to recall reading that Best Buy's business model was essentially that their margins on big ticket items are paper thin (which makes sense, because generally the prices of TVs, stereos, computers, etc. are more or less identical at Target, Wal-Mart, and (formerly) Circuit City), but they mark items like cables way the hell up to make up for it, counting on people coming into the store to buy the big stuff to opt for convenience/familiarity when they get necessary accessories.
In part, but they also have been a "category killer" and they also tried to leverage expertise via the Geek Squad.
I think the CD/DVD thing is a much bigger piece of it. Owning a DVD is a sucker bet unless you intend to watch it repeatedly, especially since you can get access to nearly everything via multiple channels on the web, and generally on demand. And that goes double for music.
The reason I hadn't been to BB in so long is that I had discovered the price of cables and such on Amazon is typically 25% of what I'd pay at BB. I assume everyone else has figured this out as well.
That, too.
That's why Kohler's observations are so good and I wanted to share them -- the competitors that are kicking Best Buy's butt weren't even on its radar screen 15 years ago.
Alice.com
Go there for your Cheerios.
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