While Amazon has been beating up on local retailers with its lower prices, brick-and-mortar stores have had the competitive advantage when it comes to shoppers who want their products immediately. Until now, Amazon shoppers had to wait at least a couple days for shipping, but the online retailer has been setting up warehouses inside some of the largest metropolitan areas in the nation. Its new goal is to provide same-day shipping to customers, a move that will surely shake up the retail industry, according to Slate.com.
Although other online retailers have tried and failed at same-day shipping, Amazon is investing billions to make same- and next-day delivery standard.
"If it can pull that off, the company will permanently alter how we shop. To put it more bluntly: Physical retailers will be hosed," Slate's Farhad Manjoo wrote.
To pull it off, the company has inked deals with states promising the construction of local warehouses. For example, Amazon is investing $130 million in facilities in New Jersey that will allow it to quickly serve New Yorkers. It is spending another $135 million to build two centers in Virginia for access to most of the mid-Atlantic states, $200 million in Texas, more than $150 million in Tennessee and $150 million in Indiana to serve the middle of the country.
California is the company's biggest investment area, however. It will be home to two major distribution centers near Los Angeles and the San Francisco Bay Area, but up to 10 more are possible, bringing the state $500 million and 10,000 jobs, according to Slate.com
Also, to make the new warehouses as efficient as possible, Amazon is investing in technology. For example, it recently purchased Kiva Systems, a company that makes robots to improve shipping times while reducing errors.
Another effort involves automated lockers deployed in a variety of retail settings, where customers can pick up products they previously ordered from Amazon.com.
Read more about online retailing.
Do you think Amazon's new system is bad news for local and brick-and-mortar stores?