BALTIMORE — Sandy Piper’s family has been merchants in Baltimore’s Hampden neighborhood for more than 40 years, but when she retires someday, she’s not sure there will be a business left.
Expenses have increased, customers aren’t spending more and online shopping has cut into sales at Sandy’s Bargain Center. Now, with the announcement that Amazon will launch one- and two-hour delivery in the city, she’s worried that even last-minute purchases won’t lure people into the shop.
“I can’t tell you what the future is going to look like,” said Piper, 51. “Hopefully I’m not out of business in 10 years, but if I am … it’s probably because of the Internet.”
Traditional retailers have long grappled with how to best adapt and compete in the online shopping age, and Amazon’s Prime Now is seen as yet another hurdle for Baltimore’s small merchants.
“Volume is everything in the retail business,” said Patrick Donoho, president of the Maryland Retailers Association. “Every time somebody clicks for Amazon, that’s a lost sale for a brick-and-mortar store. I call it death by a thousand clicks.”
The one-hour delivery guarantee will be available in coming weeks in select ZIP codes to Amazon Prime subscribers, who pay $99 a year for unlimited free two-day delivery on more than 20 million items. Consumers will pay $7.99 for one-hour deliveries. Two-hour delivery will be free.
Thanks to the opening in the next couple of weeks of a massive Amazon distribution center in the area, consumers will be able to get goods from toilet paper and soap to headphones, toys and TVs in short order at their doorsteps. Amazon said the service is focused on “daily essentials,” but also includes books, music, shoes, apparel and other purchases.
It’s expected to catch on in the Baltimore area the way it has in New York, the only place it’s available now, retail experts say. Amazon plans to continue adding Baltimore-area ZIP codes — and new categories of merchandise. It has similar plans for Miami.
“We will continue to listen to customers and respond to the items they need and want,” Amazon spokeswoman Kelly Cheeseman said.
The city and state offered Amazon about $43 million in job creation and property tax credits, as well as loans, to persuade it to put a warehouse in Baltimore.
City officials were “pleasantly surprised” that Amazon chose to roll out the one-hour service in Baltimore as one of its early markets, said William Cole, president of the Baltimore Development Corp.
Amazon has said it intends to hire about 1,000 people at the distribution center by the end of 2015, but the warehouse, with 2,000 parking spaces, has room for additional workers. Cheeseman said the company has hired additional workers for Prime Now but did not disclose the number.
“I would have to believe that if it is successful and continues to grow, that it will mean more jobs for Baltimore-area residents,” Cole said. “I just think it’s nice that Baltimore is at the front end of new technologies for once, as opposed to having to wait.”
Benn Ray, president of the Hampden Village Merchants Association, said it was “bad policy” to offer incentives to the company to locate in the city, given the threat to traditional retailers, which are reliable producers of tax revenue.
Ray, a founder of Atomic Books, said his comments may be a “tad hyperbolic,” but even more limited effects will hurt businesses.
“It’s all pure conjecture at this point, but Amazon initiating a one- or two-hour delivery in Baltimore City — there’s going to be economic impact and it’s not going to be good for anyone else that’s selling what Amazon has been selling. And what Amazon is selling is what everybody else is selling,” he said.
Cole said it is too early to determine Amazon’s impact on brick-and-mortar shops.
“It’s certainly impossible to evaluate the impact until you see how quickly this particular product penetrates the marketplace,” he said. “It’s something that we’ll have to evaluate.”
Ernestine Hohman, a longtime store manager, is one merchant who expects no ill effects.
“The majority of the people that live in our area (are) … hands-on,” she said. “They like to see what’s in the store other than those essential things.”
Donoho, for one, said despite his concerns about Amazon’s growth, he never expects online shopping to completely replace buying in stores.
“I don’t see brick and mortar going away,” Donoho said. “It’s the lifeblood of the community. … You need retail to make a vibrant downtown.”
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