When I needed 200 aluminum fence stays, I found them for $19 at Amazon and $11 at Lowe’s but I still bought them from Amazon. The decision wasn’t made because I’m a loyal dedicated Amazon shopper. It was a simple matter of economics. When I calculated all the costs, Amazon was cheaper and I’m not talking about taxes. Not having to stand in will call was worth the difference.
I really like Amazon prime. it’s about as close to painless shopping as you can get. Still, as much as Amazon would like you to believe otherwise, free shipping frequently comes with a cost increase. When I’m considering something with a significant weight, I usually spend some time looking at local prices. As the weight goes up, the chances of a possible success go up.
Brick and mortar stores are handicapped by display space, where the goal is to display all their fast moving merchandise. The slow moving merchandise is usually hidden away in the bowels of the warehouse. The only way you know they carry these items is by checking their online catalog. Want one of these items? Use the Internet to place your order and pick it up at the store. Couldn’t be simpler, right?
Right about now is where they take a good idea and turn it into utter rubbish. I look at my transactions in terms of cost. Cost has two elements, the money I pay for an item and the amount of personal time involved in obtaining the item. Face it, in this day and time, we’re trying to maximize utilization of every moment we have. Our time is quite literally money. True, there’s actually a third element, how quickly do I need the item but that’s usually a defining element. If I need it in less than 24 hours, I have no choice but to buy local.
Being rural, it takes me 30 minutes to get anywhere that has a wider variety than my local grocery store. Once at the store, I can usually manage to get my item and check out in about 10 minutes. Now I have to add the 30 minutes it takes me to get home.
For convenience, I’m going to value my time at $30 an hour or 50 cents a minute. In the example above, that works out to $35. For an item to be worth picking up locally, it has to be $35 less than Amazon’s price.
I don’t often make special trips just for that reason. I usually stop on my way home from work. That only adds an extra 5 minutes to my schedule. The total is now 15 minutes, implying $7.50 in labor costs.
In the case of my fence ties, Lowe’s is now 50 cents cheaper. Despite what my wife might say, I’m not that much of a penny pincer but if I go for more than the fence ties, say some more bird seed, the labor costs get divided among all the items and Lowe’s becomes the clear winner here.
Not so fast. The fence stays are not an open stocked item. I have to order them online and pick them up when I go to the store. The catch is that someone with no clue about why Amazon is so popular decided to run the will call through the same line as returns. Have you ever been through that line? Believe me, the benefits of social interaction, while standing in that line, are strongly negative.
Each return is an ordeal. Processing the will call line through the return line ensures a minimum of thirty minutes. Thirty minutes that I consider additional cost attributed directly against this item. The last time I picked up an item in this line, it took me over an hour. I can go into Lowe’s and buy a dishwasher faster than I can get through this line. When I add the additional hour against my fence ties, Amazon is now $29.50 cheaper than Lowe’s and that’s without adding a premium for my irritation at the inefficiency of this process.
I’m not picking on Lowe’s, the majority of brick and mortar stores seem to have the same high regard for their customers time. Either that or they’ve never been forced to stand in that line. Is it any wonder Amazon is kicking butt?
The truly amazing part of this is that Amazon already has the answer for these stores, Amazon lockers. These are lockers that Amazon has strategically placed around the country. Place your order and Amazon will deliver your items to a locker. They notify you when your locker is ready and give you a code to open your locker. Painless. They even have a locker at my local gas station.
Let’s look at the math if Lowe’s did this. Earlier, the best case for Lowe’s was 15 minutes but if they had a similar locker system situated at their store, my total transaction time would be less than seven minutes. Now we’re down to a mere $3.50 for time. Eliminate the will call factor and I’d be doing a lot more shopping at Lowe’s.
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