Amazon seems to be all the rage these days. Its founder, Jeff Bezos, pronounced on 60 Minutes that it would be delivering product by drones in the near future. (We are doubtful.) During this holiday season, Amazon is top of mind for just about everybody – and used by just about every adult to get that important gift to the front door.
Now comes word that Amazon will be taking on Sam’s Club and Costo by offering bulk household items just like you’d find at one of those discount warehouses. A handful of e-tailers have discussed adding this model, but they found that customers often just buy one item where the cost of shipping is more than the cost of the item itself.
There is reason for Sam’s Club and Costco to be concerned, though. Amazon has the infrastructure to make this work and, as pointed out here, customers of Sam’s Club and Costo tend to be higher income households with kids which are similar to those who use Amazon the most. In addition, Amazon is using a minimum order model to ensure costs of shipping are in control.
There’s also the brand permission issue. This is what Amazon does. Gets products where it needs to go efficiently and completely. The Pantry, as Amazon is calling this service for Prime members, already has a loyal audience to try it.
I can see Sam’s Club and Costco responding with their own upgraded, online efforts. In addition, they still have the advantage of the immediacy of shopping at their stores, especially for perishable items.
However, shopping at either of those retailers is a miserable experience. It feels degrading with that big warehouse, a huge shopping cart and we all feeling like gluttons.
Shopping from the convenience of your laptop is nicer, easier and more pleasant than that. The Pantry will work.