Q: What retailers are most in danger from the prospect of Amazon moving into same day delivery?

A:Articles such as this one have suggested that Amazon will get into same-day delivery in many markets.  Clearly, Amazon and their internet brethren have destroyed the likes of Circuit City (electronics), CompUSA (computers), Hastings (Music), Movie Rental (Blockbuster) and Borders (books).  Best Buy and Barnes & Noble are on their way out as well.  Their products were either a better shopping experience online (books, music, movies) or standardized commodities with high rate of change (computers and electronics).  What retailers are next when same-day delivery becomes available?

The most attractive products people would want to buy online instead of in a store are provided same-day delivery:

  • Branded and reused regularly
  • Needed in an > 8-12 hour timeframe
  • Non-perishable
  • High margin for the retailer
  • Not needing a customer try-on or experience for the buying process
  • Not financed
  • Access to suppliers not limited by dealership agreements, etc.
  • Long-tail items (low volume, specialty items)

Looking at different category retailers, it’s time to short Toys R Us and the big Sports retailers.  Click here for my handy-dandy chart of each category against the above criteria.

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