The Seattle-based tech and online retail giant founded and run by billionaire Jeff Bezos announced the plan to establish a second headquarters for its company. It gave states, metropolitan areas, and provinces through Oct. 19 to deliver proposals for the $5 billion project. Amazon expects to announce a decision on "HQ2" in 2018.
The company wants an urban or suburban area with more than one million people, shovel-ready real estate, quality of life and a "stable and business-friendly environment."
But what does this mean for you?
Amazon said it wanted an urban or suburban area with more than one million people, shovel-ready real estate, quality of life and a "stable and business-friendly environment." Last month, it was searching nationally for a second corporate headquarters. Cities and counties across the nation have scrambled to assemble bids that could entice the corporate retailer. Issued documents reveal how Amazon said it was looking for a location with good universities, a strong workforce, and a highly connected transportation infrastructure, including a major airport, highways and rail access. Amazon plans to invest more than $5 billion in whichever city it chooses.
WHAT TO EXPECT
Retail continues to suffer with notoriously thin profit margins. According to CNBC, “The e-tail (electronic retail) space is especially tricky, where only two pure-play e-tailers (Amazon and Overstock) have become and stayed profitable.”
Amazon tailors itself to a higher income demographic, while a larger proportion of Americans shop at Walmart. During a recession, consumers tend to pull back on the consumption of nonessential goods, which would disproportionately impact Amazon. Walmart’s broader base is that of lower-income customers. Therefore, a recession will hit Amazon harder because of the amount of luxury goods it sells. If Walmart can maintain profitability as it expands into e-tail, it will be setting itself up to be more recession-proof than Amazon.
Bezos company has enjoyed year to year growth for the past 4 years, while improvement of the retail industry as a whole has been sporadic at best. Officials in Philadelphia, Camden, Atlantic City and Bensalem, as well as in the state of Delaware, have all indicated they are planning to submit bids, which are due on Thursday. Philadelphia has said it is pitching three sites to Amazon: The Schuylkill Yards and uCity Square sites in West Philadelphia, and South Philadelphia’s Navy Yard. Other cities vying for the bid include Detriot, IL, Birmingham, AL, Stonecrest, GA, Tucson, AZ, and Westchester County, NY.
Home improvement stores such as Lowe’s and Home Depot have continued to thrive despite news of Amazon’s new plans. You’ll still want to pick out your kitchen tile or washer machine in-person before paying a few hundred dollars. However, higher-end grocery stores now lie in the crosshairs of Amazon’s new move, and so does its workers and customers. On the day that the retail mammoth announced its plans to build a second headquarters for is company, Kroger shares plunged more than 9%, while Target fell 5.1%, and Wal-Mart dropped 4.7%. A Forbes article points to how “some shoppers noticed what appeared to be the beta version of a new "Hire a Realtor" service on Amazon's home page. Soon screen shots of the page were circulating on trade Web sites, while the stock price of would-be competitor Zillow tumbled 3.5%.” Very few companies appear to be exempt from the new merger.
The climate is ripe for starting that new business you’ve dreamed about from your 4x3 cubicle, or from even the comfort of your living room. Since 2012, over 70% of American families are one emergency circumstance from financial disaster. Yes, that’s unfortunate, but it doesn’t have to be your future. Tip: if you’re making “payments to own”, you don’t own it. More imperative than owning things, you should own your future. I’m speaking to you small business owner, freelancer, retail employee, college student, you also, stay-at-home-mom. Launching your business can start at a very low cost - you and your family are worth the investment.
Over 65% of the internet is accessed from a mobile device, hence the huge uptick for the e-Entreprenuer. Brick and mortar retail will not go away, but the face of it is changing, and must be strategically present online. Take action today! Here are a few resources to help you get started moving your vision past limitations:
Sources: Forbes, CNBC