He points to the cost of delivery as a major factor. Amazon spends in excess of $7 billion each year on shipping costs. It trounces most competitors in sales volume but profit is another matter with the
online giant still struggling to show a reasonable return and certainly falling
behind other major store based retailers.
But don’t bin your online plans just yet. It is likely that
store based retailers will become more sophisticated in their online content
and pure online retailers will adopt stores as part of their operation. In
other words, the mix of stores and online will probably need to find the right balance
for each successful retailer in the future.
