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Amazon Is NOT Going To Put Everyone Out of Business

Amazon is not going to put everyone out of business, says retail guru Dan Hurwitz of Raider Hill Advisors. ”In fact, they've taught a lot of retailers how to distribute goods properly. They're actua...
Amazon Is NOT Going To Put Everyone Out of Business
Written by Rich Ord
  • “Amazon is not going to put everyone out of business,” says retail guru Dan Hurwitz of Raider Hill Advisors. ”In fact, they’ve taught a lot of retailers how to distribute goods properly. They’re actually going to help a lot of retailers thrive at the end of the day. In our business, the best merchant wins, whether it’s Amazon, whether it’s Macy’s, whether it’s Target, or whether it’s Walmart. As a practical matter, if you can have a bricks-and-mortar presence and a digital presence at the same time you’re going to be a winner.”

    Dan Hurwitz, CEO of Raider Hill Advisors, discusses how Amazon’s retail success has driven other retailers to improve and some may have found ways to create a retail experience even better than Amazon.

    Amazon Is NOT Going To Put Everyone Out of Business

    Amazon is not going to put everyone out of business. In fact, they’ve taught a lot of retailers how to distribute goods properly. They’re actually going to help a lot of retailers thrive at the end of the day. In our business, the best merchant wins, whether it’s Amazon, whether it’s Macy’s, whether it’s Target, or whether it’s Walmart. We’ve all learned never to bet against Walmart. As a practical matter, if you can have a bricks-and-mortar presence and a digital presence at the same time you’re going to be a winner. Target is doing it right, Walmart’s doing it right, and Best Buy is doing it great. 

    What’s happening is 70 percent of those people that buy online pick up in-store are also buying something else in the store. The cohesion between bricks and mortar and digital is what’s making people successful. Those that aren’t doing it successfully will ultimately fail. There is (significant) up-sale when you buy online and you still pick up in-store. Don’t forget, people are going to be incentivized to pick up in the store because retailers lose money shipping goods for free. They’re going to have to figure out a better way to get you into the store. When they get you into the store there’s an up-sale and that up-sale is a highly profitable up-sale. We’re going to see more of that as this evolution continues. 

    The whole concept of an apocalypse of bricks and mortar was really overblown. Best Buy was the best example. People were talking about them disappearing. They’ve done a phenomenal job turning it around as has Target and as has Walmart. That will continue.

    Some Department Stores Will Struggle To Survive

    Some (department stores) will struggle to survive and some will get it done. I happen to be a fan of Macy’s. I like what Macy’s is doing. I think they have a very strong management team and they have great real estate. They have sophisticated buyers and they’re reinventing their inventory. They’re looking they’re sourcing the right goods just at the right price at the right time. They have to make the experience better obviously. People talk about experience, but the merchandise is the experience. You can have a great experience but if you have lousy merchandise it’s not going to work. Macy’s has a great buying group that I wouldn’t bet against.

    There would have been a number of great retailers for Amazon to own (via acquisition) nationally. The question is, if they really have a store, forget about Whole Foods for a minute, just an Amazon store, I’m not so sure what they put in it. They’re great distributors of goods but if you walk into their stores today I don’t know if you would argue that they run a great experience or store with terrific merchandise. I think they have to run a different kind of store. But I do think there’s an opportunity for them to expand their reach dramatically.

    Amazon Is NOT Going To Put Everyone Out of Business

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