Amazon is launching in The Netherlands
by Alexander Loeb
Local shop owners say they are under threat of closure amidst Amazon’s expansion into the Dutch webmarket in mid-March, as online shopping continues to shape the structure of cities across the world.
Up until recent quarantine restrictions around the COVID-19 Coronavirus, the high streets of Dutch city centres had been buzzing with people window shopping and checking in and out of numerous physical retail stores on a search to snag the best deals. But with increasing numbers of e-commerce platforms coming to the market, this might change this in the near future.
“I have to close down my shop because 40% of my former profit has been replaced by customers flocking to webshops,” Sandro Cisci, owner of the San – Design and Fashion outlet in Groningen’s, said. “My rent is too high to be able to make a sustainable living through my sales anymore.”
Cisci is one of many to question the existence of physical retail in the future. He first saw a plunge in sales when the Chinese platform Aliexpress gained traction in the Netherlands in 2017. This, he explained, forced physical retail stores to keep lowering prices through deals in order to compete with the cheap online offers.
“We need to deal with the things that are happening to the local shop owners within the country instead of looking at jobs overseas, and those who come here to try and buy the market like Amazon or Aliexpress”, Cisci said when asked about new, foreign, e-commerce websites in the Netherlands.
As of March 15, Cisci has been forced to restrict his shop service due to the social distancing measures against the novel Coronavirus. This has prevented him and other shopkeepers from running their customer- dependent businesses sustainably, likely leading to a closure of such stores in the near future. Some novel innovations have come forth in the City of Groningen at least, with the ‘online department store’ Warenhuis.Groningen.com launching last week, with around 30 local shops signed up.
More than just a shop
Amazon, whose annual revenue is comparable to that of Finland’s economy, and is well-known across the world for its violations of workers rights, is currently the largest e-tailer in the world. With 800,000 workers, cheap prime subscriptions for speedy delivery services, and a hub for Dutch companies to sell products across Europe, the global market leader is intent on dominating the playing field in The Netherlands as well.
“Each of the webstores will have to prove what makes them special to the consumer,” said Thammo Bijmolt, chairman of the University of Groningen’s Economics and Business department.
Amazon’s expansion will have the “most serious consequences” for Bol.com among all players due to its similarity to the U.S. Service, says Bijmolt. “In the future, retailing will become even more omni-channel, including bricks-and-mortar stores in many cases”, he said.
“More and more cafés and restaurants are opting for ‘retailment’, blurring the lines between entertainment and retail,” the former Groninger urban planner Gerard Tolner said.
Losing the local
Such a shift is already visible in big retail chains across Europe, with H&M stores in London, Stockholm and soon Groningen testing a new business model that offers a mixture of clothing, food and furniture services.
According to Tolner, the regulations for Dutch cities and retail differ from other European countries in that the Netherlands “have always forbidden big shopping malls on the outskirts of a city center.”
Since e-commerce only entered the Dutch market about ten years ago, the shift from physical retail to webstores and changing customer demands are now being reflected in the way the city looks.
“When prices were the same everywhere, you went to the next new place to shop and only visited the center if your wanted products were not available anywhere else”, said Tolner in reference to the structural evolution of the City of Groningen.
Nationwide, the arrival of Amazon among other e-commerce platforms would likely impact shops with smaller selections in rural areas first, Tolner points out, since the comfort of home delivery and cheaper prices might lure away customers from physical retail.
As shopkeepers like Cisci struggle to compete with larger players on- and offline across the globe, Tolner sees this as part of an ever-changing industry whose evolution cannot be anticipated.
“The problem nowadays, not just within retail, but a lot of things, is that changes come so fast and can be devastating, for example having half empty streets where shops used to be,” he stated. “It’s survival of the fittest, that means being aware of trends and taking new initiatives in change.”
Naturally, this view, which has shaped both political and economic thinking for several centuries, may well have unintended consequences for the future, not least for our cities.
Image supplied by the author