Opinion: Amazon’s Latest Move Will Go a Long Way Toward Destroying Local Retail in the Same Way Amazon Contributed to the Downfall of Local Bookstores

July 13, 2012  •  Post A Comment

Amazon has a new game plan that will "permanently alter the way we shop," and thus go a long way toward destroying local retail in the same way Amazon contributed to the downfall of local bookstores, according to a technology columnist writing at Slate.

The writer, Farhad Manjoo, picks up on the fact that for years Amazon has vigorously fought charging its customers sales tax. Amazon has now abandoned that fight, Manjoo observes:

"[S]uddenly, Amazon has stopped fighting the sales-tax war. … Why would Amazon give up its precious tax advantage? This week, as part of an excellent investigative series on the firm, the Financial Times’ Barney Jopson reports that Amazon’s tax capitulation is part of a major shift in the company’s operations. Amazon’s grand strategy has been to set up distribution centers in faraway, low-cost states and then ship stuff to people in more populous, high-cost states."

Manjoo continues: "But now Amazon has a new game. Now that it has agreed to collect sales taxes, the company can legally set up warehouses right inside some of the largest metropolitan areas in the nation. Why would it want to do that? Because Amazon’s new goal is to get stuff to you immediately — as soon as a few hours after you hit Buy."

"It’s hard to overstate how thoroughly this move will shake up the retail industry," Manjoo writes. "Same-day delivery has long been the holy grail of Internet retailers, something that dozens of startups have tried and failed to accomplish. (Remember Kozmo.com?) But Amazon is investing billions to make next-day delivery standard, and same-day delivery an option for lots of customers. If it can pull that off, the company will permanently alter how we shop. To put it more bluntly: Physical retailers will be hosed."

To see the rest of Manjoo’s cogent argument, please read his entire Slate plece here.

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