I was reading a number of stories and listening to the pundits opine about whether Amazon will buy JC Penney and I have to admit I thought it was the dumbest think that I had ever heard. There is probably no way to turn it around and make it successful. No one cares that it is gone (except the employees I assume) and it isn’t even material to the bottom line for Amazon-but Whole Foods isn’t either but they did buy that anyway. So why would Amazon even contemplate a deal like this?
Well I have a theory. It’s a little wacky but let me lay it out.
What happens when we reach critical mass in package delivery? The US Postal service is a mess and can’t charge what it really costs to deliver. Fed Ex just dropped Amazon and UPS is starting to bend under the volume and Amazon is creating its own internal delivery system. What’s the next best thing if we are trying to deliver multiple packages to every home in America every few days?? Package pickup!! Maybe the secret weapon for online purchases is getting customers to pick them up locally.
After all, many packages are now sent with free shipping which is costing someone a boatload of money.
My base case is for Amazon to turn Penney’s stores into pickup locations with a stock of basic items that can be picked up within a few hours from a location close to home. Maybe there can even be a retail aspect of it where people can shop for goods and take them immediately. They most certainly could be a location to return items to Amazon rather than taking them to the post office. So maybe none of this comes to pass or maybe Amazon looks at this as they viewed Whole Foods as an experiment and a way to become more a part of the local community. There is also the opportunity for local vendors to sell into the Amazon ecosystem and have items reshipped form a Penny’s location.
It’s a theory and certainly not one that I can say with any certainty that will come to pass but you have to admit it makes some sense as a business case.
Or maybe not.