For years, Amazon has fought to avoid having to collect sales tax in order to keep its prices low. Now, though, it's given up on that that battle and instead looks set to launch a same-day delivery service—and that could destroy local retail as we know it.
Farhad Manjoo has put together a wonderfully insightful essay over at Slate which explores the impact Amazon's new strategy will have. To give some perspective, Amazon's decision to accept sales tax as inevitable means it can change its play. To avoid sales tax in the past, it had a handful of large distribution centers. Now it's set to charge sales tax, it can legally set up smaller distribution centers in any state. In turn, that in theory means it'll be able to ship products inside of the same day. As Manjoo points out, that would be incredibly disruptive:
It's hard to overstate how thoroughly this move will shake up the retail industry. 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.
Whether Amazon can pull it off, of course, remains to be seen—and to gauge for yourself you should read the Slate feature—but it seems likely. After all, as Manjoo points out, if it can ship items cross-country overnight, it sure as hell should be able to get them across-state inside a day. And at that point, you can kiss your local stores goodbye. [Slate]