Amazon's biggest weakness

David Streitfeld, writing for the New York Times’ Bits blog:

Until we achieve the teleportation of objects, there is only one way to immediately get physical goods. It is called a store.

In the meantime, Amazon is compensating by building warehouses closer to you. Order today, delivery tomorrow. Not quite teleportation, but probably the next best thing.

Streitfeld also touches on a rumor that Amazon may open “stores”. In reality, these outlets would really be showrooms, wherein customers gawk at some goods and then order them for home delivery. It’s a stupid idea, and one that Amazon is unlikely to try. Gateway tried this in the early 2000s and failed spectacularly. As Streitfeld points out, the whole purpose of the store is convenience—it’s both close to home and scratches the “need it now” itch.

It’s ironic, really, that Amazon finds itself building much of the infrastructure it once forwent. To attract more customers, they’re enticing with faster shipping times. That’s not a problem that datacenters can solve. Amazon’s quandary is remarkably similar to that faced by cell phone companies. Just as Amazon’s dominance has nibbled away at the indispensability of brick-and-mortar stores’, cell phones’ explosive growth has eroded the market for physical land lines. Yet as Amazon and cell phone companies try to serve more customers—and serve them more quickly—they will need more numerous and more distributed physical outposts.

Infrastructure ebbs and flows. New technologies may obviate old analogs, sending the pendulum swooping toward virtual replacements. But as those technologies mature, things will inevitably swing back toward physical manifestations.

Thanks to the support of readers like you, Per Square Mile remains independent and ad-free.

If you enjoy what you read, please consider supporting the site with a donation.