What Does Amazon's New Strategy Mean for Main Street?
For years Amazon fought efforts by states to collect sales taxes from its customers, relying on shipping goods from distribution centers located in "faraway, low-cost states" to customers in "more populous, high-cost states" to skirt tax laws. But in recent years, the company has stopped fighting the sales-tax war and will soon be collecting taxes from the majority of its customers.
Why the shift you ask? "Now that it has agreed to collect sales taxes," writes Manjoo, "the company can legally set up warehouses right inside some of the largest metropolitan areas in the nation." And with hundred of millions of dollars invested in new facilities in New Jersey, Virginia, Texas, Tennessee, Indiana, and California, Amazon seems to be doing just that, in an ambitious effort to achieve the ultimate in speedy service - same day delivery.
"It's hard to overstate how thoroughly this move will shake up the retail industry," says Manjoo. "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."
And the next logical question would be, what happens to our commercial districts with physical retailers under increased pressure? Will our shopping districts become home to endless storefronts of automated "lockers"? Will self-driving cars deliver our packages of diapers directly to our offices?