Indie Stores to Become More Like 'Indie Mini' Warehouses?
Arnold Schwarzenegger, Future Bridge Spokesperson?
Today's Wall St. Journal shares that Target stores saw a 20% increase in revenue--more than the chain had seen in the last 11 years combined. How did it do it? Target converted many of its physical stores into 'mini-warehouses,' where they can ship goods or have customers do curbside pick up.
What does this mean for indie stores? Stores will have to become more efficient in receiving online orders, which make up 40% of retail these days. This will require a mini-warehouse-like setup that enables stores to ship orders within 24 hours. While Walmart is much larger than indie stores, it is even eyeing this solution for its stores. It is reportedly in touch with Fabric, a maker of mini-warehouse equipment.
The burden of Target and indie stores' physical stores is also proving to be their saving grace. Retail stores are often located near customers who can either walk in or drive by. This proximity doesn't go unnoticed by Amazon. Amazon, which bought WholeFoods in part to get closer to customers, has investigated buying shuttered malls in suburban areas and converting them into warehouses to be closer.
To compete with Target's 20% sales increase, could Amazon add drive-throughs to its warehouses? Customers could then pick up their orders. Amazon's need to add a drive-through window draws attention to the heart of what Amazon is: it's really just a series of warehouses with a (terrible) website. A retailer traditionally has a physical, public area where a customer can enter, browse, and shop.
Sadly, these 'true retail' stores are expensive in terms of real estate and staff, and these factors have helped their decline as customers put the Internet in their pockets.
This retail battle reminds me of a James Cameron movie. Amazon is a robot (i.e. automated warehouse) that seeks to masquerade more and more as a human with each model upgrade (Hello, T1000! Hello, Alexa!). Humanity (i.e. a retail store) needs to fight back and enlist robots to do so. I wonder if Arnold Schwarzenegger would agree to be a Bridge spokesperson?