Investopedia is out with a story in which it points to four retailers that it believes will be able to not just withstand tough competition from Amazon, but even thrive.
They are: Target, O’Reilly Automotive, TJX Companies, and Ahold Delhaize.
The story suggests that “Target has been surprisingly resilient, with ‘remarkably steady’ foot traffic in its department stores” … that auto parts retailer O’Reilly is in a business that Amazon cannot match for speed and access … that “TJX and other off-price retailers have the advantage of convenience, location, and the thrill of bargain hunting’” … and that Ahold Delhaize, because of its “superb in-store experience,” will “continue to attract customers back to its store.” Plus, it suggests, “Average supermarkets have relatively tight margins making grocery delivery services only profitable at larger scale, as in New York or San Francisco.”
They are: Target, O’Reilly Automotive, TJX Companies, and Ahold Delhaize.
The story suggests that “Target has been surprisingly resilient, with ‘remarkably steady’ foot traffic in its department stores” … that auto parts retailer O’Reilly is in a business that Amazon cannot match for speed and access … that “TJX and other off-price retailers have the advantage of convenience, location, and the thrill of bargain hunting’” … and that Ahold Delhaize, because of its “superb in-store experience,” will “continue to attract customers back to its store.” Plus, it suggests, “Average supermarkets have relatively tight margins making grocery delivery services only profitable at larger scale, as in New York or San Francisco.”
- KC's View:
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What a crock, probably written by investment types who don’t shop and never actually go into stores.
It was just yesterday that an MNB reader, unsolicited, wrote in about an unsatisfactory experience at an O’Reilly store and noted that the CEO of the company had said he was “unconcerned” about online competition, which you’d think any CEO would know enough these days not to say. The woods are littered with the bodies of executives who thought that e-commerce would not affect them.
And Ahold Delhaize? I think some of its divisions do excellent work - Hannaford comes to mind - but I’d also refer you to a piece I did about a Stop & Shop store near me that offered only a D-level game hat does little to persuade the customer that this is where I should be bringing my business.
And suggesting that delivery only will be profitable in places like New York or San Francisco? That assumes a lot, and is at best will delude grocers who are uncompetitive that they don’t need to face this challenge head-on.
I think Target is doing okay, though I don’t think anyone would suggest that it is yet a paradigm of competitive fire and disruptive innovation, and I don’t know enough about TJX to make a judgement.
To be clear, I think there are companies that can compete with Amazon successfully. But this piece strikes me as almost willfully ignorant about the fundamental changes taking place at retail and in the consumer mindset.
