How many people who use Amazon frequently work at home or have a spouse/partner at home during the day? I would love to use Amazon for the bulk of my purchases, but I can't take delivery at work and there is no one to receive packages at my home during the day. It's completely infeasible for me to use Amazon except for occaisonal orders where it is worth taking time to stay home or visit the UPS depot to actually receive my orders.
Until Amazon solves this problem, they're not a serious competitor to traditional retail.