business news in context, analysis with attitude

by Kevin Coupe

MarketWatch has a story saying that while Amazon "has built a network of distribution centers, fulfillment centers, locker hubs, stores and more that bring the e-commerce giant within swift delivery distance to many customers," the fact remains that Walmart and Target, "with their thousands of brick-and-mortar stores, are still closer."

That conclusion was reached by the UBS Evidence Lab, which says that "Amazon delivery stations are now within 60 minutes of 77% of the U.S. population, up from 71% the previous year … But Walmart stores are within an hour of 99% of the U.S. population. And Target is an hour from 94% of the U.S. population."

There are a couple of things that people need to keep in mind.

First, these statistics are not set in stone.  Every one of these companies - plus other competitors, such as Costco - will continue to spend hundreds of millions, if not billions, of dollars working to improve their supply chains.

There was a Barron's piece over the weekend about how Walmart "is surging capital spending to $14 billion this fiscal year from just over $10 billion last year. Stores will take a backseat; the bulk of the money will go toward e-commerce, technology, and supply-chain improvements."  The point of the story was that Walmart is highly focused on becoming an e-commerce company - and proximity is a big part of that.

Second, when someone tells you that speed of delivery is not a critically important factor in terms of customer demands, don't pay any attention.  It is … and these major companies are betting it will remain so.

And third, if you are a smaller competitor without these resources, it becomes even more important for you to clarify your value proposition, becoming the retailer of choice in whatever category of product and or service at which you believe you can excel.

There's no room for average.

That's the Eye-Opener.