Today’s Times shares some of Amazon’s steps during the pandemic to grow its empire.
I used to tell retailers that they don’t know it, but they’re now in: the software business. I missed something in that statement. They are also now in the warehouse business. Websites and warehouses go hand in hand. They’re flip sides of the same coin.
As e-commerce grew, all the major retailers should have been growing their warehouse space. For example: if online was 10% of retail in 2005, make website and warehouse 20% of the budget. What did Macy’s do? The opposite: it doubled down on stores. It bought Story, the in-store shopping experience entity. (Macy’s realized its mistake and ditched it just a few years after the purchase.)
Walmart, which is struggling to catch up to Amazon, had a warehouse in New York City but then: gave it up. The article shares:
"Walmart had a warehouse in the Bronx through Jet.com, a now-defunct shopping site it owned, but later vacated the property, which is now leased by Amazon. Wal-Mart — which has no stores in the city — uses warehouses in Pennsylvania to serve online customers."
Amazon’s goal: rent cheap real estate in the Bronx and pay warehouse wages, then using its website to sell to Manhattan’s Madison Avenue residents. Pocket the spread.
I didn’t realize that New York City’s warehouses are in such short supply that people are renting out their apartments to store packages, becoming de facto mini-warehouses. Think of it as ‘Airbnb Warehouse.’ Excerpt:
"Mr. Cepeda is creating a homegrown distribution system of “mini-warehouses.” He has recruited more than 1,000 residents in Manhattan and Brooklyn who will get paid to use their apartments to store goods for retailers and send them out for delivery."
Web and warehouse (logistics) investments are where retail is. Walmart, Macy's, and Bridge retailers are dealing with that reality.
Maybe Bridge needs to offer a new package deal: we give retailers a website full of product AND a full mini-warehouse, too 😅