Jewish World Review Feb. 11, 2002 / 29 Shevat, 5762
store on your lap
But there was another story in the business pages -- one that received considerably less attention.
It said that Amazon.com had posted its first-ever net profit in the fourth quarter of 2001, and that the company had done $1.12 billion in net sales.
Kmart, before the bankruptcy filing, had 2,114 stores.
Amazon.com, for all intents and purposes, has one -- located in your house. Or in your office. Or on your lap.
In those two numbers reside the most significant retailing story of the week just past -- and, conceivably, for many years to come.
Because if what you read into the Kmart bankruptcy is the descent of one famous merchant, and the ascendancy of two of its competitors, you may be ignoring what's right in front of you.
Store? What's a store?
The definition of a general-service store at one time was the downtown department store. Every city had one -- it was where people went, without giving it much thought, to purchase just about anything they might need.
(Usually just a few steps down from a town's big department store -- offering more commonplace goods at cheaper prices -- was an S.S. Kresge store. The classic dime store. That's worth mentioning now because when the owners of the S.S. Kresge chain sensed that America's shopping patterns were changing -- that dime stores could no longer compete -- the Kresge executives opened a new kind of store. They called it Kmart.)
Thus, the bankruptcy of Kmart Corp., in the context of retailing history, should not be seen as especially shocking. People's preferences in buying things -- where and how they buy them -- change. Yes, Target discount stores are brighter than Kmarts; yes Wal-Marts are more gargantuan. Wal-Mart and Target are well on their way to becoming what the old-line department stores once were: the first choice for all-purpose shopping.
But look again at that story inside the business section. The one that didn't attract as much attention.
Amazon.com has begun to make money.
Its customers seem to like it. It's not just an on-line bookstore anymore -- you can purchase a surprisingly broad array of items from it. You can browse for hours, looking at the merchandise and reading other customers' reviews of the items. No one is pressuring you. There are no lines. You didn't have to park. Your purchases will be delivered to your door, neatly packaged.
And Amazon.com's expenses?
Start with the fact that there are no freestanding stores -- nowhere in the United States does Amazon.com have to pay rent or property taxes for a store, or pay employees to open the front doors each morning, to mop up the store aisles, to hang the special-sale signs, to watch over the cash registers. Kmart did, in each of those 2,114 stores -- each store had a front door.
Why even mention that?
Because it's the most important part of this story. Amazon.com is way out front in the on-line shopping business -- you can bet that its unstated goal is not just to be the world's biggest store, but -- symbolically -- the world's only store. If it succeeds in making its shopping experience satisfying enough . . . if people begin asking themselves "why bother?" when considering driving somewhere to shop . . . if every time a shopper is met with indifferent service by a human being at a traditional store, and is pleased with his or her computerized shopping experience. . . .
If that happens, something fundamental in American retailing -- in American life -- will have changed. The potential ramifications are big beyond imagining -- starting with the declining need for people to work in stores, and the booming need for people to carry boxes from trucks to houses. Not to mention the very way it will feel to live in this smaller world.
The big news is not the questionable future of the Kmart stores -- the big news is the future of stores, as we have known them.
You may disagree. We can talk about that. I'll meet you at the soda fountain at S.S.