Question: Although online sales channels have enjoyed tremendous growth over the
Although online sales channels have enjoyed tremendous growth over the past decade, a strategic disadvantage which could limit future growth potential is that of immediacy. For physical products ordered online, consumers do not have the same experience of taking the product with them immediately when they purchase it in a store. Rather, they must wait at least a day and sometimes several days. Recently, the world’s largest online retailer, Amazon.com has attempted to mitigate the immediacy problem by offering same-day delivery in a number of major metropolitan areas. But the service is pricey—$17.99 per shipment plus $1.99 per pound of product weight. Now some traditional bricks and mortar retailers such as Nordstrom and the retail division of Jones Apparel Group Inc. think they have found a synergy that will provide a differential advantage over Amazon.com by using their retail stores as delivery centers for online operations. By doing so, these retailers believe they will be able to offer same-day service more efficiently and at lower cost than Amazon.com because, unlike Amazon.com, they have many stores very close to their customers. Do you think this synergy between the online and retail store channels available to traditional retailers that makes possible quicker and cheaper product delivery to consumers will provide a differential advantage to most retail store chains that also offer online sales channels?
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