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Amazon Launches One-Hour Delivery Service In Baltimore and Miami
schwit1 writes Amazon.com announced the launch Thursday of its one-hour delivery service, Prime Now, in select zip codes in Baltimore and Miami. It initially launched in Manhattan in December. The one-hour service, available to Amazon Prime subscribers through the Prime Now mobile app, costs $7.99. Two-hour delivery is free. From the article: "Amazon Prime's success has blown away the company's projections and 'petrified' local and national retailers, said Howard Davidowitz, chairman of Davidowitz & Associates, a national retail consulting and investment banking firm headquartered in New York City. 'If you're a retailer and you're not scared of Amazon ... you should be,' he said. 'They are the change agent. They are leading the change in retail.'"
8 dollar to not wait one hour extra? Wow, that's a huge difference.
Might be but I can see cases where it might be worth it to some folks. Honestly pretty much anything I would get in my car to go get would take at least 30-60 minutes of my time + gasoline. In a place like Manhattan I could easily see it taking much longer than in the midwest suburbs where I live. My hourly wages are significantly higher than $8 and the opportunity cost to me and my company if I have to leave for an hour to go buy something could easily justify an $8 delivery charge if we needed it right away.
I buy a lot of stuff through Amazon (and other online vendors) precisely because of the opportunity cost to shop in person. Sometimes shopping is fun but most of the time it's just a chore plus it puts wear and tear on my car and takes up time I could put to better use.
If I place seven orders a day, I alone have monopolized a driver and his vehicle for an entire work shift if the distribution center is 30 minutes away from me.
Probably not true because the delivery person would probably batch several deliveries into a single run. In fact it would be seem to be economically insane to do otherwise. This only works in high population density locations (presumably) so you aren't likely to be the only person ordering stuff at a given time near your location. It would take some clever software and planning but it's doable. My undergrad degree is in industrial engineering and this is a pretty nifty operations research problem.
Even if there were distribution centers where every Walmart has a store in the US and they had a fleet the size of FedEx themselves (FedEx even just does a daily route), can they really keep the kind of items everywhere that I would order?
Of course not. It will necessarily be a limited menu so to speak. Same reason Walmart doesn't stock everything in their stores that you can buy through their website.
Amazon are single-item-only things from marketplace sellers, very few of whom ship their entire inventory to Amazon for safe-keeping.
I shop a lot through Amazon and only about 20% of what I buy comes from marketplace sellers and maybe 5-10% is stuff Amazon doesn't stock themselves. 90% of the time Prime delivery is an option. In any case this rapid delivery service will almost certainly be for stuff you buy from Amazon themselves only.
It's actually kind of a brilliant idea for the same reason that Walmart opening big stores in small towns is a great idea. If they can get there first and be the first to make it work at scale, it (potentially) takes a lot of the oxygen out of the room for competitors. The biggest threat to Amazon right now is companies like Walmart realizing that their stores can also serve as warehouses and getting their IT up to snuff. Amazon has been building warehouses all over the place to get ahead of this competitive threat. Amazon will have a hard time matching Walmart in small towns but with this Walmart might have a hard time matching Amazon in big cities.
If you have retail experience you will see that many people will come to the shop to try and then buy online.
People do this when your prices are higher than online or when they get no extra value from your "retail experience". People engage in showrooming at Best Buy precisely because their prices have historically sucked compared with online and the retail experience is nothing special. People shop at places like Bass Pro Shops because the retail experience is outstanding for their target audience. It adds value to the trip so people are willing to go out of their way to go there. People shop at Walmart almost entirely because the prices are low despite the fact that the shopping experience is widely acknowledged to suck. People shop at Nordstroms for exactly the opposite reasons - they know the prices are high but the service is generally excellent and that has a value to many people.
You can compete on price or you can differentiate yourself with added value in some way.
One counter is to sell your own products but that does not work in every sector.
Name one please. I can't think of one offhand where it couldn't work.
Retail is dead anyway, but the brainless corpse hasn't quite gotten the message yet.
I miss the day of the independent hardware store, grocer, pharmacy, camera shop,hi-fi store, etc. The first wave of crushing those small businesses came in the 70's - 80's in the form of malls. Many independents went to the malls and survived. Those who refused, well -- I've seen entire city blocks of shops and cinemas close due to the malls. (Santurce, Puerto Rico, for example, lost I'd say over 90% of its cinemas and retail stores, all due to one mall.)
During the 90's big-box retailers such as Target, Walmart, etc. came and shredded what was left. Now malls are populated by franchise chains, not independents - and the malls themselves are a dying breed in the US.
So what do I think of Amazon and other e-tailers? I love it. Shopping for some things such as shoes and clothing can be a bit difficult, but for other goods such as music, blurays, books, parts, etc -- I don't even bother going to a mall, what with the crowds and stupid, ignorant sales staff. With Prime and a few dollars i have to wait only a day. Surely I can do that! Maybe not 20 years ago, but now I have the patience.
For some of my fringe hobbies I go out of my way to support the small businesses. Like Marshall Street for disc golf, for example - they're a little store in Massachusetts. Or Airline Museum for aircraft die-casts. Or RightStuf for anime. It's not all about Amazon, one can (and should!) give business to small online shops who deserve it!
Amazon is revenge on the big-box stores for wiping out small-time merchants. I don't think it set out to be that, but every time I see a walmart close I grin a little. I resented it when they popped up, and now I don't mind seeing them go.
I've even bought a few appliances from Amazon, without showrooming. Careful reading of descriptions and in-depth studying of reviews help to offset losing the ability to hold the object in your hand prior to purchase. So far I'm happy with my online appliance purchases.
It would be deliciously ironic if there's a renaissance of the small independent shop away from a mall. I'd love to see that. But then I'd love to see things made in the country of purchase again (USA for me) but that's, for now, just a dream.
Retail is dead, it shot itself in the head years ago. Good riddance.
The "Civilized World" jumped the shark ca. 1973.
Am I the only wondering if Jeff Bezos was a science fiction fan? Robert Heinlein basically predicted an Amazon-like behemoth that did everything for everyone, called General Services. Granted, the book portrays them as less "product" and more "service," but the idea is very similar!
General Services got its start as a dog walking company, and grew from there. (Books anyone?) As a result of its humble beginnings, General Service's 's tag line is "We Also Walk Dogs." Really awesome read. I came across it in a compilation called "The Green Hills of Earth," which is chock full of other really nice little stories. And for those of you who have only read Heinlein's novels, I found the short stories a really refreshing read.