In my book Nike’s Consumer Direct Offense, Amazon & StockX: The Disruption of Sneaker Retail, I discuss in great detail that stores like Jimmy Jazz, DTLR, City Gear and Shoe Palace, stores who deal with customers who are primarily ‘cash’ customers, have a moat around their businesses,
One of the few opportunities for growth for companies in Nike’s wholesale chains is e-commerce, but smaller urban accounts are relying on a moat that is no longer a large chasm, cash customers…
Brick and Mortar locations benefit from the percentage of cash customers who still visit stores. As many smaller chains operate in urban markets this is a place of security for the chains. However, it should be noted that the Unbanked[1] population that has been the backbone of urban accounts, is slowly becoming Banked in a different way. Cash customers are utilizing options such as PayPal.me and Cash App which both have credit card options for these users. These traditionally unbanked customers are now capable of experiencing online retail for the first time.
[1] Unbanked customers are typically low-income people who don’t utilize banks to keep their money. This sector of people use payday loans and check cashing options to pay bills and therefore aren’t a part of the digital eco-system.
Amazon has now aligned with Western Union and this is another plank in the bridge to cross the moat to the cash customer. The problem still remains that in the sneaker industry, actually in all industries, Amazon has yet to realize that the cash customer isn’t in a position to have packages left on their doorsteps. In most cases, there isn’t a doorstep. In the book I discuss Amazon Last Mile and Nike’s Konbini concept. If Amazon has expanded their cash customer reach at locations that house Western Unions the next logical step in logistics is the implementation of Amazon’s Hub Locker into Western Union chains.
As always this is something to keep a close watch on particularly for smaller cash customer driven chains.
