Amazon Prime Pantry

I don’t know if you have ever gone to a RadioShack. Maybe you were in the US and needed a specific cable in a hurry, and a local told you of this mysterious palace where all kinds of wires were stocked. That, ladies and gentlemen, was a RadioShack. If you needed a wire or a connector and you needed it right now, RadioShack is where you went – and you paid a lot for the privilege. Obviously, in an age where shoppers can Google which wire they need for their problem, click through to a page where they can buy it for one-fifth the cost on the high street – and have said wire arrive at their door in a few hours – RadioShack was doomed.

With its looming trip to bankruptcy court, American vultures are already circling RadioShack’s estate, eyeing up what came to, remarkably, over 4,000 US locations.

Some of the rumoured bidders, such as US telecoms company Sprint, would make obvious sense. But then there’s Amazon. If rumours of RadioShack’s very own killer potentially buying up a sizeable portion of the well-placed estate are true, it should send a shiver down the spine of high-street retailers around the world.

Arsène Wenger once said of the early 21st century Chelsea FC revolution: “Roman Abramovich has parked his Russian tanks on our lawn and is firing £50 notes at us.” Arsenal have since been condemned to finish forever in fourth place, trailing behind the money that suddenly arrived in the Premier League.

The effect of Amazon arriving with a physical presence on the high street could be much the same. Not just for tech retailers, mind: Amazon Pantry and Amazon Fresh – the online giant’s two ventures into online grocery – show Amazon has the appetite to get serious about the grocery business too.

Amazon acquiring a bricks and mortar presence may sound counterintuitive at first. After all, much of its success is down to its “long tail” strategy, offering the kind of breadth of choice that’s impossible to replicate if you have to manage stock in physical stores.

But in the US, Amazon is already showing it can “choice edit” to great effect. Where fast delivery of goods is key, it focuses on a core range of a couple of thousand SKUs and makes sure it can move these products fast. It limits its range to core items its can offer excellent discounts on, and increases its ability to compete with physical stores on the speed the consumer can have the product to hand. 

Recently Amazon introduced same-day delivery in the US city I was living in. It was a game changer. One morning, I realised my computer mouse had stopped working. Clicking through to Amazon (which was difficult, what with the malfunctioning peripheral), I ordered a new mouse, and it was with me within four hours. I didn’t even have to move. The prospect of a physical shop with the ability to achieve that kind of distribution for the less tech-savvy customer, and at a price that clearly undercuts the high street, should be driving the high street to drink. Of course, one of the cheapest places they can now buy this drink is amazon.co.uk. Be afraid.

 

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