He points to the cost of delivery as a major factor. Amazon spends in excess of $7 billion each year on shipping costs. It trounces most competitors in sales volume but profit is another matter with the online giant still struggling to show a reasonable return and certainly falling behind other major store based retailers.
But don’t bin your online plans just yet. It is likely that store based retailers will become more sophisticated in their online content and pure online retailers will adopt stores as part of their operation. In other words, the mix of stores and online will probably need to find the right balance for each successful retailer in the future.