Friday, March 07, 2014

Shake That Thing: Does Amazon Have No Limits?

The Atlantic: RadioShack Is Doomed (and So Is Retail)
RadioShack's long slide coincides the steep ascendance of Amazon as America's great brick-and-mortar destroyer. In 2003, Amazon and RadioShack each had about $5 billion in sales, as WSJ business editor Dennis Berman pointed out. Last year, Amazon had $75 billion to RadioShack's $3.5 billion. ....... At the end of 2013, RadioShack had 5,000 brick-and-mortar stores with 27,500 employees and $3.5 billion in sales, which is $127,000 in sales per employee. Its website is the 1,066th most popular in the world. At the end of 2013, Amazon had zero brick-and-mortar stores with 117,300 employees (full- and part-time) and $75 billion in sales, which is $640,000 in sales per employee. Its website is the 5th most popular in the world. ..... The company's biggest sales category is the wireless market, and that's some of the worst news for RadioShack. “The mobile phones category was very weak, and mall traffic is very weak,” analyst David Schick said. “The majority of folks have their mobile phones. We are past adoption.” ...... the confluence of e-retail and increasingly efficient global sourcing and stocking (i.e.: the Amazon & Wal-Mart Effect) would eventually gut retail employment ...... With $600,000 in sales per employee, Amazon is 3X-4X more efficient than the stores it's eating.

Does have no limits? It does. It has severe limits. (1) It is not even attempting to do High Touch. Health and education are all about High Touch, it seems. That same principle can be applied to traditional retail. (2) You can piggyback on Amazon infrastructure and do retail. You can use their warehouses.

Stores like RadioShack do have the option to rise from the ashes. But I doubt they will. The rethink that is required, I don't think they will go for it. RadioShack is like the New York Times. It has taken a Huffington Post to "get" digital. News is not going away. Neither is retail. If anything it is getting bigger than ever. RadioShack has to move from being a poorly stocked itty bitty warehouse to being an experience.

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