Jeff Bezos, founder of Amazon recently talked about how Amazon has grown, and where their key expenditures went over their slow but sure rise to profitablity. CBS Marketwatch and Information Week both have more indepth coverage of his speech.
Amazon has grown and changed the way they manage and move information over the years, they have spent more that 3 times as much on technology as fulfillment. This technology allows them to personalize the shopper's experience to a high degree, and I believe this is a big part of their success.
The challenge for me and my small business retail clients is to scale this model effectively. And from $900 Million we have a lot of scaling to do.