Amazon Unveils One-Hour Delivery Service(wsj.com)
wsj.com
Amazon Unveils One-Hour Delivery Service
http://www.wsj.com/articles/amazon-com-launches-superfast-delivery-in-nyc-1418903192?mod=e2tw
158 comments
Tipping is a nuisance, something that goes in the "Con" category in a Pro & Con analysis. The vendor is implicitly warning you that you shouldn't count on getting good service included just because you officially paid for it. They're warning you that they have no real control over their service providers, and "it would be a shame if something unforeseeable, like getting caught in traffic, were to happen to a delivery you were counting on", so you'd better work something out with them privately and hope the "service" provider is pleased with the result.
Like many people, I have a lot of options when it comes to who I buy from. I now have to pay sales tax to Amazon, and there are often other vendors who are cheaper, or charge no sales tax, or have stores five minutes away where "shipping" is instantaneous and always free for even the smallest purchase. Even so, I'll often pay more and buy from Amazon anyway because of their service. Anything that reduced their service quality would shift some of those purchases away from Amazon.
I haven't seen this new Amazon system for myself yet, so maybe there's no real problem, but if "free" 2-hour delivery turns out to require air-quotes around the "free" along with a nudge, nudge, wink, wink, "it would be a mistake to disappoint me" attitude from the delivery guy, I'll use the system a lot less.
Like many people, I have a lot of options when it comes to who I buy from. I now have to pay sales tax to Amazon, and there are often other vendors who are cheaper, or charge no sales tax, or have stores five minutes away where "shipping" is instantaneous and always free for even the smallest purchase. Even so, I'll often pay more and buy from Amazon anyway because of their service. Anything that reduced their service quality would shift some of those purchases away from Amazon.
I haven't seen this new Amazon system for myself yet, so maybe there's no real problem, but if "free" 2-hour delivery turns out to require air-quotes around the "free" along with a nudge, nudge, wink, wink, "it would be a mistake to disappoint me" attitude from the delivery guy, I'll use the system a lot less.
The stores don't charge sales tax. The state mandates that they collect sales tax. If the state doesn't mandate that the store collect sales tax, the store won't "make" you pay it, though I think technically in most states, you're still supposed to file those purchases with your state income tax and pay then.
If I can get what I want more cheaply from Vendor A than from Vendor B, the question of whether Vendor B is charging me more as an agent of the state or on its own behalf is unlikely to be relevant to the decision.
I certainly hope you don't carry that attitude with you throughout life. Tip your bartenders and pizza delivery guys... they make nothing, anyway. (And, if you're in tech, chances are an extra $2 for a tip is NOT going to break your budget.)
I think tipping well is absolutely one of the best returns on investment available in life.
From a selfish perspective: a few extra dollars can make a huge difference in service, particularly services you use repeatedly.
From a humanity perspective: a few extra dollars can also make a big difference in the life of the person you're tipping...usually jobs with tips do not pay very well.
From a selfish perspective: a few extra dollars can make a huge difference in service, particularly services you use repeatedly.
From a humanity perspective: a few extra dollars can also make a big difference in the life of the person you're tipping...usually jobs with tips do not pay very well.
The equivalent cost of shipping from a brick-n-mortar store that's five minutes away is almost surely more than 15 minutes of your time (could easily be 30 minutes) and, if you drive, $2-4 at the IRS/GSA rates.
For me, avoiding that 15-20 minutes of annoyance is well-worth calculating and paying a tip. (Agree that that's a negative, but it's relatively small negative.)
For me, avoiding that 15-20 minutes of annoyance is well-worth calculating and paying a tip. (Agree that that's a negative, but it's relatively small negative.)
You're right that effective B&M shipping cost is not always free. The brick 'n mortar cost of shipping is anywhere from a lot ("I'd have to drive into the city just for that and pay exorbitant parking garage fees, and I've got too much to do this afternoon...") to nothing ("I'll be in that store tomorrow anyway, and I won't need it until Thursday...")
In the former case, it's unlikely that the tip would impact my decision; in the latter, it very well might. In either case, it goes in the "con" category and, at the margin, changes some fraction of my Amazon-yes-or-no purchase decisions, always in the direction of no.
In the former case, it's unlikely that the tip would impact my decision; in the latter, it very well might. In either case, it goes in the "con" category and, at the margin, changes some fraction of my Amazon-yes-or-no purchase decisions, always in the direction of no.
Agreed on all counts. At least build the tip into the cost, like the ride-sharing services do.
I'd vastly prefer doing away with tips altogether and just paying a living wage, but the least these services can do is to spare me extra work.
I'd vastly prefer doing away with tips altogether and just paying a living wage, but the least these services can do is to spare me extra work.
For personal deliveries, tip with cash, set online tip to zero.
For corporate deliveries, tip online according to corporate policy, no personal decision needed.
For corporate deliveries, tip online according to corporate policy, no personal decision needed.
Regarding your first point, changing the tipping medium does not solve the underlying problem. Tipping sucks.
Have you experienced customer service in countries where there is no tipping? It is often entertaining and involves unpredictable "extra work". Perhaps digital reputation systems will provide a stick to replace the carrot of tipping, unless labor laws evolve to impose Fair Reporting on mobile logistics data.
Stereotypes of French waiters aside, service is just fine in Europe. (Speaking as a former resident with very fond memories.) Tipping is just a way for American employers to rip off their most vulnerable workers.
Tipping is a truly toxic practice, and it's a burden on customers as well. Why would anyone want to be assigned extra work to evaluate how unhappy they are in order to calculate how much extra they should pay?
Tipping is a truly toxic practice, and it's a burden on customers as well. Why would anyone want to be assigned extra work to evaluate how unhappy they are in order to calculate how much extra they should pay?
> Tipping is just a way for American employers to rip off their most vulnerable workers.
Could you please elaborate? I don't see how tipping can be involved in ripping off workers in the United States.
Employers are always required to pay their workers minimum wage - the federal minimum wage in the worst case, and sometimes the state minimum wage when it applies and is higher. See: http://www.dol.gov/elaws/faq/esa/flsa/002.htm
> If an employee's tips combined with the employer's direct wages[] do not equal the federal minimum hourly wage, the employer must make up the difference.
Could you please elaborate? I don't see how tipping can be involved in ripping off workers in the United States.
Employers are always required to pay their workers minimum wage - the federal minimum wage in the worst case, and sometimes the state minimum wage when it applies and is higher. See: http://www.dol.gov/elaws/faq/esa/flsa/002.htm
> If an employee's tips combined with the employer's direct wages[] do not equal the federal minimum hourly wage, the employer must make up the difference.
Except that the legislators and employers take tips into account when lobbying for and setting the minimum wage.
We see it as "that waiter was nice, leave a generous tip".
Employers see it as "if they don't do a good enough job they won't make any tips, and the problem will naturally work itself out." This is patently unfair because it treats tips as implied expected income, and wages are set so low that you can't make a livable income without them. This is patently unfair.
We see it as "that waiter was nice, leave a generous tip".
Employers see it as "if they don't do a good enough job they won't make any tips, and the problem will naturally work itself out." This is patently unfair because it treats tips as implied expected income, and wages are set so low that you can't make a livable income without them. This is patently unfair.
For jobs where tipping is expected, in most states the expected tips can be taken away from the minimum wage - so a server could be paid $2 per hour + tips.
While that may be technically true, I imagine any waiter not able to pull in tips to exceed the minimum wage would soon find themselves out of a job, especially in at-will states. In practice tipping just transfers the cost from the employer to the consumer.
The cost is always going to be covered by the consumer.
When the cost is included in the bill, the consumer has less choice. When its an implied "tip", its optional.
In theory yes, but it's basically not optional when the overwhelming social consensus is that you're a horrible person if you don't tip, even for mediocre service. Maybe it started out as a way to reward excellent service, but now it just allows businesses to deceive customers by posting prices that are less than what you actually end up paying.
No contradiction. The customer has the choice of covering the tip with money or with social retribution.
Either way, they're the ones paying.
Either way, they're the ones paying.
It also contributes to sexual harassment. It's a bit evil, basically.
> Stereotypes of French waiters aside,
Which I found to be quite wrong. I didn't have a single experience of bad service in my week in Paris.
Which I found to be quite wrong. I didn't have a single experience of bad service in my week in Paris.
Yes, I have. Japanese customer service wipes the floor with US customer service, and they'll run down the street to return your "forgotten change" if you attempt to tip in a restaurant.
Agreed, but I think Japanese service culture is an exceptional case ... really haven't experienced anything like it anywhere else.
The flip side is that it is thoroughly expected that you remain loyal to your establishment. No going to a restaurant just because it's close by. You go to your good friend's restaurant instead, even if it's across town.
This arrangement isn't free or magical. It exists because of the cultural wrappings.
This arrangement isn't free or magical. It exists because of the cultural wrappings.
Is this actually a serious post?
Countries without tipping happen to compensate their employees with something called 'wages'.
It goes a long way to developing a real service culture and not fake 'yes sir thank you sir' service in the US
Countries without tipping happen to compensate their employees with something called 'wages'.
It goes a long way to developing a real service culture and not fake 'yes sir thank you sir' service in the US
Some countries with a "real service culture" wouldn't accept wages, never mind tips, i.e. the business would be family owned and operated.
Wishing for ultra-fast delivery with no tipping is NOT the same as wishing for tipping to go away altogether.
Tipping is helpful when there is likely to be a high variation in customer service.
In a small-item delivery scenario the customer-vendor interaction is 0-15 seconds. How much tipping variation do you expect there to be?
Tipping is helpful when there is likely to be a high variation in customer service.
In a small-item delivery scenario the customer-vendor interaction is 0-15 seconds. How much tipping variation do you expect there to be?
There's quite a few service industry jobs in the US that don't do tipping. I haven't found things to be better or worse.
What irks me the most is that tipped industry veterans will declare, very forcefully, that 20% is the minimum in all circumstances -- which is somewhat fair, as I do believe in fair wages. However, if a minimum exists, why are we even tipping?
What irks me the most is that tipped industry veterans will declare, very forcefully, that 20% is the minimum in all circumstances -- which is somewhat fair, as I do believe in fair wages. However, if a minimum exists, why are we even tipping?
Because businesses are cheap and found a way to not pay their employees by creating a culture of tipping.
Yes. Accounting for cultural and random variations, it's the same.
I have. Here in Australia. Service, in general is fine.
Tipping actually gives an incentive to do way too much and often to pester the customer with unecessary attention. Probably not everyone is fond of getting her glass ostensibly refilled every 5 minutes, which happens with the emphasize on service that a tip intensive system creates.
There's a pizza chain that does this for online orders, and it drives me crazy. I don't tip until after service is rendered, because tipping ahead of time insures nothing. There's no place to put a custom note on the order either, so I have to order by phone. It's good for them that they have great pizza, because I'm sure this turns off a lot of potential customers, but not me.
I suspect that when I tip online for pizza it automatically gets bumped to the lowest priority of all of the driver's deliveries. He already has my money, and prioritizing all of the cash-tip orders over mine gives more potential for earning tips.
Of course, my sample size is too small to say anything conclusive. After it felt like I was noticing a pattern a couple of times I just switched back to tipping cash.
Of course, my sample size is too small to say anything conclusive. After it felt like I was noticing a pattern a couple of times I just switched back to tipping cash.
When I've tipped online for pizza, and tip pretty well, I tend to get my pizza very quickly with a driver wanting to please me (like one time an order was messed up slightly and he immediately drove back and brought a new one without me even asking).
My vague guess is that if you leave an above-average tip on an online order, the order gets immediately grabbed my a delivery person since they know they'll get at least that much of a tip.
My vague guess is that if you leave an above-average tip on an online order, the order gets immediately grabbed my a delivery person since they know they'll get at least that much of a tip.
Yeah. This is anecdotal, obviously, but I always tip online and tip pretty well. My pizzas always seem to get here as quickly as when I tipped in person, and the drivers have thanked me specifically for it a few times.
Be an interesting thing to really do some research on, though.
I will say I tend to agree that I'd rather see employees be paid a higher rate by the company itself and then have their performance monitored and be rewarded or punished accordingly. I've worked in a few places that paid hourly folks $14+ an hour, in parts of the country where that was pretty decent money for a job you get get off the street, and they managed to keep really efficient employees who did their jobs well.
Be an interesting thing to really do some research on, though.
I will say I tend to agree that I'd rather see employees be paid a higher rate by the company itself and then have their performance monitored and be rewarded or punished accordingly. I've worked in a few places that paid hourly folks $14+ an hour, in parts of the country where that was pretty decent money for a job you get get off the street, and they managed to keep really efficient employees who did their jobs well.
Ah, I was probably tipping more average amounts. But most of the time I just walk in to town and pick things up myself, so very small sample size.
Next time I order delivery I'll have to try a giant tip and see what happens.
Next time I order delivery I'll have to try a giant tip and see what happens.
I don't like the automatic tips for another reason: I'm always skeptical the delivery person actually gets the tip.
I was told by an eat24 delivery guy once that he didn't get the tips from his restaurant when they were included in electronic payment. he could have been fucking with me though.
Tipping ahead of time ensures that driver gets paid. Which is a bit more important than whether you're first or last during a delivery run.
No, the Pizzeria paying the driver ensures that the driver gets paid.
That's the problem is: most Pizzerias don't. Or don't pay a living wage.
"Or don't pay a living wage."
Why does every job have to pay a "living wage"? Almost all the pizza delivery folks I knew were doing it part-time for extra cash. Pizza delivery is not a long term career. This notion that every job is a career job is just silly and is detrimental to our youth trying to pick up extra cash and some experience.
Why does every job have to pay a "living wage"? Almost all the pizza delivery folks I knew were doing it part-time for extra cash. Pizza delivery is not a long term career. This notion that every job is a career job is just silly and is detrimental to our youth trying to pick up extra cash and some experience.
Because it's so, so easy to get trapped in a cycle of endless below-livable jobs just to support yourself.
My personal belief, and I'm more than willing to pay more for goods and services to support it, and I live in a country where we have a liveable minimal wage, is that every job if worked 40 hours should be enough for a very modest, but not totally hopeless life. You also then have time off to use to improve yourself via school or some other way.
If you're working back-to-back jobs 80 hours a week that pay nothing you have zero time for yourself, zero time for good planning and zero time to attend any kind of classes.
Being poor and desperate impairs your ability to think, plan and change yourself{1}.
1: http://psych.princeton.edu/~psych/psychology/research/shafir...
Edit: the thread is too long for me to reply to the responses below. What an unfortunate design HN, as the "right of reply" has effectively been stripped from me.
My personal belief, and I'm more than willing to pay more for goods and services to support it, and I live in a country where we have a liveable minimal wage, is that every job if worked 40 hours should be enough for a very modest, but not totally hopeless life. You also then have time off to use to improve yourself via school or some other way.
If you're working back-to-back jobs 80 hours a week that pay nothing you have zero time for yourself, zero time for good planning and zero time to attend any kind of classes.
Being poor and desperate impairs your ability to think, plan and change yourself{1}.
1: http://psych.princeton.edu/~psych/psychology/research/shafir...
Edit: the thread is too long for me to reply to the responses below. What an unfortunate design HN, as the "right of reply" has effectively been stripped from me.
> Because it's so, so easy to get trapped in a cycle of endless below-livable jobs just to support yourself.
That's an appeal to emotions and has nothing to do with the argument.
> My personal belief, and I'm more than willing to pay more for goods and services to support it, and I live in a country where we have a liveable minimal wage, is that every job if worked 40 hours should be enough for a very modest, but not totally hopeless life. You also then have time off to use to improve yourself via school or some other way.
You are more than willing to pay more, but the very people you talk about who need cheap goods and services to stretch a budget don't have that extra money. The forcing of every job to be "living wages" removes a part of the labor force that is willing and able (due to parents or other income) to provide services for less money. Removing part-time, dependent labor from the the market increases the costs of goods and services for everyone and screws poor people. You might feel better, but it has a detrimental effect.
> If you're working back-to-back jobs 80 hours a week that pay nothing you have zero time for yourself, zero time for good planning and zero time to attend any kind of classes.
This is a different issue. This is the disappearance of full-time, low skill jobs. There are many factors including changing laws that have impacted this area. Our current bad economy and companies preparing for changes in health care laws are two. Worsening the situation by raising the minimum wage is only going to get more people fired / hours reduced or speed automation (McDonald's self ordering machines).
Doing something to help people get an education or training is one thing, eliminating a whole class of workers that make goods and services cheaper is a problem.
I remember the paper, and remember a negative reaction, but do not have time to read and find my sources on it again.
That's an appeal to emotions and has nothing to do with the argument.
> My personal belief, and I'm more than willing to pay more for goods and services to support it, and I live in a country where we have a liveable minimal wage, is that every job if worked 40 hours should be enough for a very modest, but not totally hopeless life. You also then have time off to use to improve yourself via school or some other way.
You are more than willing to pay more, but the very people you talk about who need cheap goods and services to stretch a budget don't have that extra money. The forcing of every job to be "living wages" removes a part of the labor force that is willing and able (due to parents or other income) to provide services for less money. Removing part-time, dependent labor from the the market increases the costs of goods and services for everyone and screws poor people. You might feel better, but it has a detrimental effect.
> If you're working back-to-back jobs 80 hours a week that pay nothing you have zero time for yourself, zero time for good planning and zero time to attend any kind of classes.
This is a different issue. This is the disappearance of full-time, low skill jobs. There are many factors including changing laws that have impacted this area. Our current bad economy and companies preparing for changes in health care laws are two. Worsening the situation by raising the minimum wage is only going to get more people fired / hours reduced or speed automation (McDonald's self ordering machines).
Doing something to help people get an education or training is one thing, eliminating a whole class of workers that make goods and services cheaper is a problem.
I remember the paper, and remember a negative reaction, but do not have time to read and find my sources on it again.
How is your fist point an appeal to emotions there's nothing evocative at all. If you have multiple below living wage jobs you've still a fixed amount of time in the day you can work just now you're being paid less for when you do work AND have higher transportation costs by definition. Maybe job security is an advantage as you won't get fired from everything all at once.
You keep repeating how the suggestions will make things more expensive for poor people. We're suggesting to pay poor people to not be poor.
You keep repeating how the suggestions will make things more expensive for poor people. We're suggesting to pay poor people to not be poor.
Your suggestions mean that people will have more money but less purchasing power. They will still be poor, and a part of the workforce that has existed from the beginning will be gone. That part of the workforce has an effect on keeping goods and services at a lower price. Raising the cost of labor and getting rid of those "I just need some spending money jobs" results in companies looking to replace the higher cost workers or raise prices. Neither of these things benefit poor people.
"We're suggesting to pay poor people to not be poor."
I'm suggesting that the best bet for poor people is to provide a path to training that allows them to have jobs that are higher value to employers. Making low value jobs cost more doesn't help. It hurts as these people don't have high value skills and you are removing spending money from others that could be in the workforce.
"We're suggesting to pay poor people to not be poor."
I'm suggesting that the best bet for poor people is to provide a path to training that allows them to have jobs that are higher value to employers. Making low value jobs cost more doesn't help. It hurts as these people don't have high value skills and you are removing spending money from others that could be in the workforce.
> The forcing of every job to be "living wages" removes a part of the labor force that is willing and able (due to parents or other income) to provide services for less money.
This, and I think every one of your points, can be sufficiently addressed with one word: Australia.
My 19 year old unskilled housemate gets paid minimum wage $21.08 per hour as a casual.[1] She works 4 days a week and supports herself just fine. They say the cost of living is high in Australia, and it is -everything is expensive here- but we have options: we live in a share house and pay $100 a week per room (four of us) including electricity and Internet. She doesn't own a car, and doesn't smoke cigarettes or drink alcohol. Financially she isn't struggling at all.
The minimum wage for full time employment is $16.87 per hour, which includes 10 day a year sick leave and 20 days a hear paid leave.[1]
Also, because everyone here is paid a 'living wage' we're able to afford to pay social welfare. 'Newstart Allowance' is paid to unemployed job-seekers at $515.60 per fortnight.[2] It isn't a lot, below the poverty line apparently, but it is enough to rent a room buy food.
I do not think any of your arguments hold water.
1. http://www.fairwork.gov.au/about-us/policies-and-guides/fact...
2. http://www.humanservices.gov.au/customer/enablers/centrelink...
This, and I think every one of your points, can be sufficiently addressed with one word: Australia.
My 19 year old unskilled housemate gets paid minimum wage $21.08 per hour as a casual.[1] She works 4 days a week and supports herself just fine. They say the cost of living is high in Australia, and it is -everything is expensive here- but we have options: we live in a share house and pay $100 a week per room (four of us) including electricity and Internet. She doesn't own a car, and doesn't smoke cigarettes or drink alcohol. Financially she isn't struggling at all.
The minimum wage for full time employment is $16.87 per hour, which includes 10 day a year sick leave and 20 days a hear paid leave.[1]
Also, because everyone here is paid a 'living wage' we're able to afford to pay social welfare. 'Newstart Allowance' is paid to unemployed job-seekers at $515.60 per fortnight.[2] It isn't a lot, below the poverty line apparently, but it is enough to rent a room buy food.
I do not think any of your arguments hold water.
1. http://www.fairwork.gov.au/about-us/policies-and-guides/fact...
2. http://www.humanservices.gov.au/customer/enablers/centrelink...
This, and I think every one of your points, can
be sufficiently addressed with one word:
Australia.
My 19 year old unskilled housemate gets paid
minimum wage $21.08 per hour as a casual.[1] She
works 4 days a week and supports herself just
fine. They say the cost of living is high in
Australia, and it is -everything is expensive
here- but we have options: we live in a share
house and pay $100 a week per room (four of us)
including electricity and Internet. She doesn't
own a car, and doesn't smoke cigarettes or drink
alcohol. Financially she isn't struggling at all.
The minimum wage for full time employment is
$16.87 per hour, which includes 10 day a year
sick leave and 20 days a hear paid leave.[1]
I'm not sure a frugal person with 3 roommates making 25% above the minimum is a good example.
Also, because everyone here is paid a 'living
wage' we're able to afford to pay social welfare.
'Newstart Allowance' is paid to unemployed
job-seekers at $515.60 per fortnight.[2] It isn't
a lot, below the poverty line apparently, but it
is enough to rent a room buy food.
I do not think any of your arguments hold water.
The argument is high minimum wage cuts youth and unskilled employment and removes a class of worker from the workforce. Looking at [0][1], I think the trends show just that.
0) http://www.ausstats.abs.gov.au/ausstats/meisubs.nsf/0/333D19...
0b) small side note: I do wonder why the change to this reporting is occurring according to
1) http://www.aph.gov.au/About_Parliament/Parliamentary_Departm...
2) http://www.smh.com.au/federal-politics/political-news/christ...
3) http://www.bloomberg.com/news/2014-12-09/abbott-removes-poli...
4) http://www.brisbanetimes.com.au/national/tertiary-education/...
> the thread is too long for me to reply to the responses below. What an unfortunate design HN, as the "right of reply" has effectively been stripped from me.
You can probably reply now. IIRC, there is a delay in the reply link being available for long threads, as a very blunt measure to reduce fast/long back and forth arguments.
You can probably reply now. IIRC, there is a delay in the reply link being available for long threads, as a very blunt measure to reduce fast/long back and forth arguments.
I don't know where you live but most of the food delivery people in my major US city are at least over 30, many even in their 50s. Lots of immigrants too.
For unskilled labor a career might be a job.
For unskilled labor a career might be a job.
This may be because of an expectation of tips though? If the tips dried up they would be forced to move that pay to the persons wage.
That would work if workers and employers were equals.
They don't. That's why you need strong unions: they tip the scales to a more equal balance of powers.
Prompt service ensures a good tip. The driver will get paid either way, and he'll get tipped either way. However, since the tip reflects the quality of the service, the amount cannot be determined ahead of time. I'd never stiff the driver though, regardless of how bad the service is.
I don’t think your assumption holds for repeat interactions. Drivers want to get consistently tipped, so they do have an incentive for treating people who already tipped them well, namely insuring that those people will remain customers.
> I don’t think your assumption holds for repeat interactions.
I would agree with that. However, I don't order enough pizza to be a "known" customer. If I had a rapport with a particular service vendor, I wouldn't mind tipping up front, provided that they have demonstrated a consistently high level of service prior.
I would agree with that. However, I don't order enough pizza to be a "known" customer. If I had a rapport with a particular service vendor, I wouldn't mind tipping up front, provided that they have demonstrated a consistently high level of service prior.
It's hard for me to see how this doesn't hurt local vendors badly. Of course, it depends on what the the 25,000 items are, but that was one of the key differentiators between Amazon and local stores--if you needed something and you needed it now, the local store was the only option (things like cabling for a new TV, gifts for a party that night, etc).
Now, for prime members in NYC at least, Amazon is a viable option.
What other moats do local stores have? Amazon wins on:
Now, for prime members in NYC at least, Amazon is a viable option.
What other moats do local stores have? Amazon wins on:
* selection
* cost
* convenience
* reputation
* knowledge (this depends on the local store)
* feel good factor (supporting local business and employment)
* hold the item in your hand (not sure there is one word for it in English, but the Germans probably have one)
* I need it now
If a Mom and Pop store can't differentiate, why would it be good for them to stay in business?
The ones that provide something extra will raise their prices and be more expensive, and people will go when they're willing to pay the difference; look at the independent book shops in London as an example.
It's a romantic idea and all, but beyond that I don't think "local vendors are de facto a good thing" is a reasonable starting point.
The ones that provide something extra will raise their prices and be more expensive, and people will go when they're willing to pay the difference; look at the independent book shops in London as an example.
It's a romantic idea and all, but beyond that I don't think "local vendors are de facto a good thing" is a reasonable starting point.
Local vendors keep the money circulating around the local community in the form of wages, rent, and profits. So yes, they're good for a community.
>Local vendors keep the money circulating around the local community in the form of wages, rent, and profits
But that's all it is; a different allocation of wealth. If you happen to live in that community, great.
The question becomes: why should I care about your local community as opposed to some other local community, or even the global community, that stands to benefit from getting more for less?
But that's all it is; a different allocation of wealth. If you happen to live in that community, great.
The question becomes: why should I care about your local community as opposed to some other local community, or even the global community, that stands to benefit from getting more for less?
You might want to care about your own community and use your own local vendors.
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Honestly, I like getting out of the house and going to the store. Not every day, I do my share of buying online. But there are plenty of times I'd rather go out and I'm not tempted to sit around and wait to be brought something, even if it could come within the hour.
I often do reverse show-rooming. I'll browse through a real bookstore, which is fun, but I'll look up reviews on mobile and factor that into my buying decisions.
I often do reverse show-rooming. I'll browse through a real bookstore, which is fun, but I'll look up reviews on mobile and factor that into my buying decisions.
>I'll browse through a real bookstore, which is fun, but I'll look up reviews on mobile and factor that into my buying decisions.
This is my use-case. For my small corner of the world, Amazon has been a boon to used-book stores (even regional chains), as it is now easier to see what I'm buying.
This is my use-case. For my small corner of the world, Amazon has been a boon to used-book stores (even regional chains), as it is now easier to see what I'm buying.
It's a draw on cost too, as Prime prices are sometimes inflated beyond other stores or even the regular retail price.
As for convenience, those without a doorman always think twice before placing orders online.
As for convenience, those without a doorman always think twice before placing orders online.
As for convenience, those without a doorman always think twice before placing orders online.
I think that's one of the major gains of cheap/free fast delivery. It's easier to order if you know you'll get it during the next hour or two when you'll be at home, instead of "tomorrow".
I think that's one of the major gains of cheap/free fast delivery. It's easier to order if you know you'll get it during the next hour or two when you'll be at home, instead of "tomorrow".
Agreed, which is why I'm interested in this service. In the past I've only used Amazon for large orders when I know I'll be around for 2 days to receive packages during the day.
What does the local store win on?
I think in the long-run, it'll be price.
Sure, in the short-term, Amazon can do what they do and undercut on price, but in the modern age, Wal-Mart has pretty much figured out the optimal model of inventory storage/distribution and the model of keeping inventory on-hand and having customers come to them enables them to do this at an incredibly large scale and at razor-thin margins. Yet they are still margins.
As we have seen before, delivering products at that scale and selection via delivery is extraordinarily challenging to do profitably. Amazon can do a lot of things, but one thing I don't think they will ever be able to do is bring products to peoples' doors at a cheaper price than Wal-Mart can store inventory in large stores and distribute to customers who come to them. There are just too many complexities around the delivery/customer service/quality control processes to make the economics work out.
I think in the long-run, it'll be price.
Sure, in the short-term, Amazon can do what they do and undercut on price, but in the modern age, Wal-Mart has pretty much figured out the optimal model of inventory storage/distribution and the model of keeping inventory on-hand and having customers come to them enables them to do this at an incredibly large scale and at razor-thin margins. Yet they are still margins.
As we have seen before, delivering products at that scale and selection via delivery is extraordinarily challenging to do profitably. Amazon can do a lot of things, but one thing I don't think they will ever be able to do is bring products to peoples' doors at a cheaper price than Wal-Mart can store inventory in large stores and distribute to customers who come to them. There are just too many complexities around the delivery/customer service/quality control processes to make the economics work out.
Wal-Mart has the downside that you have to go to Wal-Mart though. I don't just mean that in the dismissive sense that their stores are unpleasant (which they are), but there's a fundamental mismatch between an urbanizing population and a big box store in the suburbs that everyone has to drive to and lose their car in a massive parking lot.
In fact, Sam Walton knew this. His mission wasn't to dominate the world of retail, it was to bring the same economies of scale urban retail already had to rural communities.
Keep in mind that physical storefronts have costs too. Wal-Mart has warehouses too, and they're probably simpler, but when all you have is warehouses, there's a lot of complexity you can add and still have a simpler, more cost-effective model than employing battalions of people to operate cash registers and stock shelves in thousands of small towns and suburbs across the country.
In fact, Sam Walton knew this. His mission wasn't to dominate the world of retail, it was to bring the same economies of scale urban retail already had to rural communities.
Keep in mind that physical storefronts have costs too. Wal-Mart has warehouses too, and they're probably simpler, but when all you have is warehouses, there's a lot of complexity you can add and still have a simpler, more cost-effective model than employing battalions of people to operate cash registers and stock shelves in thousands of small towns and suburbs across the country.
there's a fundamental mismatch between an urbanizing population and a big box store in the suburbs that everyone has to drive to and lose their car in a massive parking lot.
There are Wal-Marts all over big cities, though. Public transit takes you to them.
Amazon's new service is more expensive than public transit. Also, you also don't get any exercise when using it, whereas many people like going out for a walk. That's a minor point though.
It's probably more accurate to say "There's a mismatch between Wal-Mart and San Francisco." Possibly cultural.
There are Wal-Marts all over big cities, though. Public transit takes you to them.
Amazon's new service is more expensive than public transit. Also, you also don't get any exercise when using it, whereas many people like going out for a walk. That's a minor point though.
It's probably more accurate to say "There's a mismatch between Wal-Mart and San Francisco." Possibly cultural.
The nearest Walmarts to Seattle are in Renton and Bellevue. The nearest Walmarts to New York are either in New Jersey or upstate. There are Walmart "Neighborhood Markets" in Chicago, but the big box stores that they famously scale with are in the suburbs. There seems to be a Wal-Mart in LA, but not downtown, rather in the area that seems like a bunch of suburbs concatenated together. There are a few in Houston, mainly in the suburbs that were annexed to the city but there's at least one inside the 610 loop. (Having been to Houston, it is also largely a series of suburbs concatenated together.) Those are the four largest cities in the US.
By and large Walmart is a suburban phenomenon. They're trying to move into the cities because they don't have anywhere else to expand, but the assumptions underlying big box stores aren't going to hold up in that environment and they're going to become just another brick-and-mortar retailer, with all the costs that entails.
By and large Walmart is a suburban phenomenon. They're trying to move into the cities because they don't have anywhere else to expand, but the assumptions underlying big box stores aren't going to hold up in that environment and they're going to become just another brick-and-mortar retailer, with all the costs that entails.
Hm, it looks like you're right. I should live in those places before talking about them.
It just seemed odd to say that Amazon has an advantage where Wal-Mart doesn't. The announcement says Amazon is offering the service in Manhattan, but there's a Wal-Mart supercenter just 30 minutes away: http://i.imgur.com/oHS2h43.png
Do you feel Amazon can make good headway in dense city areas? It seems like if Wal-Mart can't figure out how to organize distribution pipelines in a given area, then Amazon wouldn't be able to, either. So I was just trying to figure out what critical advantage Amazon might have.
It just seemed odd to say that Amazon has an advantage where Wal-Mart doesn't. The announcement says Amazon is offering the service in Manhattan, but there's a Wal-Mart supercenter just 30 minutes away: http://i.imgur.com/oHS2h43.png
Do you feel Amazon can make good headway in dense city areas? It seems like if Wal-Mart can't figure out how to organize distribution pipelines in a given area, then Amazon wouldn't be able to, either. So I was just trying to figure out what critical advantage Amazon might have.
Wal-Mart has B&M locations that you travel to (and if you've seen a sitcom in the last 30 years you know that "just go to New Jersey" isn't a popular solution for New Yorkers). Amazon ships the stuff to you. Now they do it in an hour, if you're in New York. That's as long as it would take to get to Walmart and back, except you can continue living your normal life instead of driving to New Jersey.
(Also, New Yorkers don't drive. So that Wal-Mart in New Jersey is closer to an hour away by transit.)
(Also, New Yorkers don't drive. So that Wal-Mart in New Jersey is closer to an hour away by transit.)
> just 30 minutes away
That's 30 minutes (each way) of my time, though. No such problem with delivery.
That's 30 minutes (each way) of my time, though. No such problem with delivery.
> I don't just mean that in the dismissive sense that their stores are unpleasant (which they are)
They once were, but I've noticed a marked improvement lately. The newly opened Walmart locally is very nice, clean, and well lit. The local grocery is a dump in comparison[1].
1) no, I don't have this home town sympathy for the local grocery store since it did some bad things in the past that makes Walmart look like a saint in comparison.
They once were, but I've noticed a marked improvement lately. The newly opened Walmart locally is very nice, clean, and well lit. The local grocery is a dump in comparison[1].
1) no, I don't have this home town sympathy for the local grocery store since it did some bad things in the past that makes Walmart look like a saint in comparison.
Another big difference between this and Wal-Mart is geography. Wal-Mart's strongest areas are less-densely-populated rural areas where one store can draw customers from miles around. And indeed -- you can't easily set up a same-day Amazon delivery service in rural America. The distances and low population density make it completely impractical. For the foreseeable future, Amazon will compete with Wal-Mart in these areas using traditional UPS-style delivery and larger selection.
But this is going into New York City. And the flipside is that you can't put a Wal-Mart in the middle of NYC -- it's cost prohibitive. So it's not clear that this initiative even competes with Wal-Mart really. And brick and mortar stores in the middle of an expensive city have huge real estate costs, so it's difficult (though not necessarily impossible) for them to compete on cost the way Wal-Mart does.
But this is going into New York City. And the flipside is that you can't put a Wal-Mart in the middle of NYC -- it's cost prohibitive. So it's not clear that this initiative even competes with Wal-Mart really. And brick and mortar stores in the middle of an expensive city have huge real estate costs, so it's difficult (though not necessarily impossible) for them to compete on cost the way Wal-Mart does.
So then my question would be- where does Amazon store their inventory? They still have to figure out a way to give people selection and timely delivery but do so in a way that doesn't involve storing large amounts of inventory in expensive, densely-populated urban areas. The same rules apply to them as Wal-Mart in that regard. Wal-Mart could open a distribution center in Manhattan too, if the economics of it worked out.
So let's supposed that this can be done profitably in New York. New York is a special case in a sense, that it is one of the most densely-populated areas on earth, and so deliveries do scale there in a way they don't elsewhere. But then what is the play in a place like Atlanta, Dallas, or Los Angeles, where driving is essential and addresses are wildly irregular?
So let's supposed that this can be done profitably in New York. New York is a special case in a sense, that it is one of the most densely-populated areas on earth, and so deliveries do scale there in a way they don't elsewhere. But then what is the play in a place like Atlanta, Dallas, or Los Angeles, where driving is essential and addresses are wildly irregular?
They store it in New Jersey, for NYC, if you were wondering.
http://www.nj.com/mercer/index.ssf/2014/07/amazon_warehouse_...
http://www.nj.com/mercer/index.ssf/2014/07/amazon_warehouse_...
Walmart hardly counts as a "local" store. (For that matter, they also sell online.) And between Walmart and Amazon, I'd much rather do business with Amazon.
Actual "local" stores seem highly unlikely to win on price.
I suspect that Amazon and others will solve the "showroom" problem in the not too distant future, for the handful of products where that actually matters.
Other than brand loyalty, I don't see any obvious niche that a local store could do better.
Actual "local" stores seem highly unlikely to win on price.
I suspect that Amazon and others will solve the "showroom" problem in the not too distant future, for the handful of products where that actually matters.
Other than brand loyalty, I don't see any obvious niche that a local store could do better.
> Sure, in the short-term, Amazon can do what they do and undercut on price, but in the modern age, Wal-Mart has pretty much figured out the optimal model of inventory storage/distribution and the model of keeping inventory on-hand and having customers come to them enables them to do this at an incredibly large scale and at razor-thin margins. Yet they are still margins.
That only works because people don't value their time it takes to get to Wal-Mart and shop there.
That only works because people don't value their time it takes to get to Wal-Mart and shop there.
It's in no way clear that Amazon wins on selection. In 25K SKUs, Amazon will have electronics, but almost certainly hace fewer SKUs than a dedicated electronics store. They will have groceries, but not as many as a grocery store. They will have clothing and housewares, but surely only a small sampling relative to Macy's.
I shop at Amazon Fresh in Seattle sometimes, and the selection is significantly trimmed relative to pretty much any local grocery store I can walk into. The tradeoff is the convenience of not having to go to the store and spend my time traversing the aisles.
I shop at Amazon Fresh in Seattle sometimes, and the selection is significantly trimmed relative to pretty much any local grocery store I can walk into. The tradeoff is the convenience of not having to go to the store and spend my time traversing the aisles.
They are starting with 25k SKUs. They have the potential to have infinite SKUs in this program, while brick and mortar stores are limited to shelf space.
That being said, it might make sense to keep the selection artificially small for multiple reasons.
That being said, it might make sense to keep the selection artificially small for multiple reasons.
Depending on how much volume you have, inventory turns are an important gate on how many items you can afford to carry. And I would imagine that there are practical limits on how many SKUs you can pull stock from and still deliver in an hour.
I'd dispute both cost and knowledge.
If a store is close to your commute route, for example, the delivery costs will probably never be low enough to match with that.
I would also dispute on knowledge. In this case, knowledge is a matter of time: you can always google exactly the product you need, but that's going to cost you time. If you're not sure about the exact specifications of what you need, reading reviews isn't necessarily going to help either. Salespeople, if available, can tell you what you need and what's the best cost-benefit (probably leaning towards the more costly).
There's an additional aspect you didn't account for: entertainment. I don't get entertainment off of shopping, but i know a lot of people do. You get some of that while looking things online, i.e. 'browsing' items, but it's not the same experience. Also, shopping is often tied to other entertainment like eating out, movies, etc -- this is done strategically for mutual benefit of mall venues -- and of course can't be replicated online.
It's easy to imagine even if the whole catalog of Amazon were available today for 1-hour delivery for $7.99 (or less), a big part of the average urban dwellers' shopping would still be done offline.
If a store is close to your commute route, for example, the delivery costs will probably never be low enough to match with that.
I would also dispute on knowledge. In this case, knowledge is a matter of time: you can always google exactly the product you need, but that's going to cost you time. If you're not sure about the exact specifications of what you need, reading reviews isn't necessarily going to help either. Salespeople, if available, can tell you what you need and what's the best cost-benefit (probably leaning towards the more costly).
There's an additional aspect you didn't account for: entertainment. I don't get entertainment off of shopping, but i know a lot of people do. You get some of that while looking things online, i.e. 'browsing' items, but it's not the same experience. Also, shopping is often tied to other entertainment like eating out, movies, etc -- this is done strategically for mutual benefit of mall venues -- and of course can't be replicated online.
It's easy to imagine even if the whole catalog of Amazon were available today for 1-hour delivery for $7.99 (or less), a big part of the average urban dwellers' shopping would still be done offline.
>If a store is close to your commute route, for example, the delivery costs will probably never be low enough to match with that.
I think it's not if it is "close," but if it's "convenient" to your commute route -- in terms of location and/or commuting method. If I am in NYC and I need to get off the subway, walk a half block, get the item, and then walk back and get not he subway; I might not want to do it, depending on the item. If I'm somewhere where I'm driving my commute, I might not think twice of driving five minutes out of my way and I can pick up almost anything. If I'm riding my bike to commute, I might easily be able to stop, but I might not be able to carry it.
I think it's not if it is "close," but if it's "convenient" to your commute route -- in terms of location and/or commuting method. If I am in NYC and I need to get off the subway, walk a half block, get the item, and then walk back and get not he subway; I might not want to do it, depending on the item. If I'm somewhere where I'm driving my commute, I might not think twice of driving five minutes out of my way and I can pick up almost anything. If I'm riding my bike to commute, I might easily be able to stop, but I might not be able to carry it.
> If I'm riding my bike to commute, I might easily be able to stop, but I might not be able to carry it.
You could get one of these: http://www.christianiabikes.com/en/ :)
I see a lot of then in Copenhagen these days. Mostly families though, since they use them to carry both kids and shopping. Also probably requires a certain infrastructure to work; you wouldn't want to ride one of those in traffic (esp. with kids), only in dedicated bike lanes.
You could get one of these: http://www.christianiabikes.com/en/ :)
I see a lot of then in Copenhagen these days. Mostly families though, since they use them to carry both kids and shopping. Also probably requires a certain infrastructure to work; you wouldn't want to ride one of those in traffic (esp. with kids), only in dedicated bike lanes.
I've seen a couple and given something like that a thought, for a bike to run errands; but, I'd never commute with one. (I'm not sure where I'd park it at work, among other things.)
I've actually seen a handful of these in SF as well, which doesn't really have the infrastructure I'd think would be necessary.
Good catch on entertainment (and people watching). I'm not much for that, but my SO is.
As for knowledge, I think that it is a mixed bag--I've been in stores where the staff outclassed most anything I could find on the internet, and others where, let's just be charitable and say that the staff was lacking.
As for knowledge, I think that it is a mixed bag--I've been in stores where the staff outclassed most anything I could find on the internet, and others where, let's just be charitable and say that the staff was lacking.
I was thinking recently that at this point, I'd only feel comfortable opening up a retail business if a significant part of the business was oriented toward short notice purchases, as that would be somewhat protected from Amazon and other online retailers.
With this development that "short notice" protection doesn't seem so concrete.
With this development that "short notice" protection doesn't seem so concrete.
You missed customer service, a huge one for me. I actively try to avoid brick and mortar shopping ever since a hardware store owner refused to take back a defective stud finder. Amazon will bend over backwards to make things right for a customer, and accepts returns for any reason.
for what it's worth, this is why i use my amex for every in-store purchase i make.
There's other places amazon is very vulnerable.
For example, try buying a car fob battery -- in my case, a cr2016. You'll see dozens of such batteries, some name brand, some not. But if you read the comments, you'll find that even the purportedly (from the listing name and image) name brand batteries often aren't. eg [1] After spending 30 minutes trying to find a single listing that actually would send me a bloody name-brand, within expiration date battery, I just gave up. This was far more hassle than just going to my local hardware store.
Another place amazon is very vulnerable is personal / body goods and food. I'm fine buying books and flashlights from them, but for food, deodorant, sunblock, lipsticks, etc, I want real goods not fake ones. Ideally purchased by amazon directly from the originating company. Instead, I'm confident that when you purchase those goods, even if directly from amazon and not one of the marketplace vendors, amazon will look to find the closest warehouse with such an item in it (even listed from one of the marketplace vendors) and send that to you. Amazon also makes it quite difficult to just purchase directly from amazon and not from a marketplace vendor. I think there's going to be a huge scandal when people realize lots of those goods are fake.
[1] http://www.amazon.com/Energizer-CR2016-Lithium-Battery-5-Pk/...
For example, try buying a car fob battery -- in my case, a cr2016. You'll see dozens of such batteries, some name brand, some not. But if you read the comments, you'll find that even the purportedly (from the listing name and image) name brand batteries often aren't. eg [1] After spending 30 minutes trying to find a single listing that actually would send me a bloody name-brand, within expiration date battery, I just gave up. This was far more hassle than just going to my local hardware store.
Another place amazon is very vulnerable is personal / body goods and food. I'm fine buying books and flashlights from them, but for food, deodorant, sunblock, lipsticks, etc, I want real goods not fake ones. Ideally purchased by amazon directly from the originating company. Instead, I'm confident that when you purchase those goods, even if directly from amazon and not one of the marketplace vendors, amazon will look to find the closest warehouse with such an item in it (even listed from one of the marketplace vendors) and send that to you. Amazon also makes it quite difficult to just purchase directly from amazon and not from a marketplace vendor. I think there's going to be a huge scandal when people realize lots of those goods are fake.
[1] http://www.amazon.com/Energizer-CR2016-Lithium-Battery-5-Pk/...
If the local vendors get hurt by this, it means they were providing an inferior service, and we're better off replacing them with Amazon.
Don't forget the time you spend commuting to said brick-and-mortar store. Who wants to waste 45 minutes driving to and from Target, only to wait in line listening to screaming kids? There are only so many hours in a day.
I'll do my best to support my neighborhood hardware store, but I'll definitely delegate many purchases to Amazon Prime delivery if it means saving a trip to Target, Best Buy, or other big box store.
I'll do my best to support my neighborhood hardware store, but I'll definitely delegate many purchases to Amazon Prime delivery if it means saving a trip to Target, Best Buy, or other big box store.
The local stores I visit are almost never mom & pop shops anyways, but huge franchises like Home Depot, Walgreens, Safeway, or Target. So the feel good factor is non-existent.
What I don't understand about the big retailers is why they haven't been doing something similar all along to compete with Amazon.
Amazon has been building warehouses all across the country near cities to reduce shipping times. But the retailers already have what amounts to hundreds of warehouses at every population center, plus the inventory management systems. Why haven't they put their inventories online and offered same day delivery to neutralize Amazon?
Amazon has been building warehouses all across the country near cities to reduce shipping times. But the retailers already have what amounts to hundreds of warehouses at every population center, plus the inventory management systems. Why haven't they put their inventories online and offered same day delivery to neutralize Amazon?
No kidding. The pizza delivery model would seem a no-brainer. You simply have a few employees who know where everything in the store is (and can probably fetch anything 10 times faster than a normal customer) and then batch them out to drivers. It seems like Walmart could service 100 million people this way (with their entire inventory) just like Domino's et al have been for decades.
It's so obvious that I'm guessing they've done the math and it doesn't work.
It's so obvious that I'm guessing they've done the math and it doesn't work.
Amazon has their entire infrastructure focused on rapid delivery of small amounts of stuff to a customer.
Big retailers are focused on maintaining optimum levels of inventory at their big box stores all over the country.
It's a different problem.
Big retailers are focused on maintaining optimum levels of inventory at their big box stores all over the country.
It's a different problem.
nine days ago: https://news.ycombinator.com/item?id=8720898
I'm pretty sure the logistics of 1 hour delivery can get pretty insane. However what I am really looking forward to is real time delivery anywhere.
And how about returns? Can I return stuff in one hour too?
And how about returns? Can I return stuff in one hour too?
Why would you want to? You can get the replacement or alternative products, and every front to boot, and then mail it back within 30 days.
What do you mean by real time delivery ? Instant delivery ? Real time delivery tracking ?
For Amazon Prime users, I could very well see returns piggybacking on deliveries - the delivery courier would simply pick up the return.
For Amazon Prime users, I could very well see returns piggybacking on deliveries - the delivery courier would simply pick up the return.
Just as Amazon is trying to use 1 hour delivery to compete better
against brick-and-mortar companies, Google is trying to help the
brick-and-mortar companies compete with Amazon by providing a competing
delivery service called "Google Express" (previously called "Google
Shopping Express") [1]. It's been mentioned a few times on hn [2,3].
[1] https://www.google.com/shopping/express/
[2] https://news.ycombinator.com/item?id=8037108
[3] https://news.ycombinator.com/item?id=8452337
[1] https://www.google.com/shopping/express/
[2] https://news.ycombinator.com/item?id=8037108
[3] https://news.ycombinator.com/item?id=8452337
> Google is trying to help the brick-and-mortar companies compete with Amazon
I'm not sure that wording is accurate. Google is leveraging the brick-and-mortar companies to compete with Amazon and collect more data about its users. Arguably some of the most valuable data they could get; spending and buying habits.
I doubt Target is thrilled that Google is looking to inject themselves as a middleman between them and their customers. Target has historically leveraged customer buying habits pretty aggressively [1]. I'd be surprised if their execs aren't frantically trying to figure out how to keep Google from "helping" them compete with Amazon.
[1] http://www.forbes.com/sites/kashmirhill/2012/02/16/how-targe...
I'm not sure that wording is accurate. Google is leveraging the brick-and-mortar companies to compete with Amazon and collect more data about its users. Arguably some of the most valuable data they could get; spending and buying habits.
I doubt Target is thrilled that Google is looking to inject themselves as a middleman between them and their customers. Target has historically leveraged customer buying habits pretty aggressively [1]. I'd be surprised if their execs aren't frantically trying to figure out how to keep Google from "helping" them compete with Amazon.
[1] http://www.forbes.com/sites/kashmirhill/2012/02/16/how-targe...
It'll be pretty easy for target to prevent google from helping them, they can just decline to participate in the program. They are participants though, which should tell you something about how target actually feels about the program. And they don't lose any customer habit data, as customers still use their loyalty cards through Google Express.
Almost all of Google's profit right now is derived from B2B relationships. Providing services to other businesses is what they do. Yes, they make a good profit while they're doing it, but to suggest the business who are google's customers don't see any benefit from it is silly.
Almost all of Google's profit right now is derived from B2B relationships. Providing services to other businesses is what they do. Yes, they make a good profit while they're doing it, but to suggest the business who are google's customers don't see any benefit from it is silly.
Valid point. I'm not sure what "participate" really means though. Do Google Express customers have to provide their loyalty cards? Does Target get all of the data they'd get if the customer shopped in store or through their own delivery service?
It would be silly to imply that Google's customers don't see any benefit as they're obviously getting some revenue and data.
But it would be similarly silly to imply that Target participating in the program doesn't mean they're concerned about it and not looking for ways to handle the customer's experience end to end.
It would be silly to imply that Google's customers don't see any benefit as they're obviously getting some revenue and data.
But it would be similarly silly to imply that Target participating in the program doesn't mean they're concerned about it and not looking for ways to handle the customer's experience end to end.
>Do Google Express customers have to provide their loyalty cards?
No. I order stuff from Target via Google Shopping Express multiple times a week without a loyalty card. I didn't even know Target had loyalty cards, in fact! Also if you're logged into your account you go go here and see what loyalty cards you can type in: https://www.google.com/shopping/express/#SettingsPlace:
The list includes Costco, REI, Staples, etc. but not Target.
No. I order stuff from Target via Google Shopping Express multiple times a week without a loyalty card. I didn't even know Target had loyalty cards, in fact! Also if you're logged into your account you go go here and see what loyalty cards you can type in: https://www.google.com/shopping/express/#SettingsPlace:
The list includes Costco, REI, Staples, etc. but not Target.
Target offers 5% discount on purchases if you use the RedCard Debit (linked to your bank account), credit, or Visa credit cards (no longer offered for new customers.) Essentially, they give you the fees charged by the payment brands and processors as a discount for using their card instead.
Target could compete effectively with the Google and Amazon offerings by adding delivery to their Cartwheel app.
Target could compete effectively with the Google and Amazon offerings by adding delivery to their Cartwheel app.
Exactly. Google isn't trying to help anyone but themselves, that's business 101. Just like Instacart is helping themselves by leveraging Whole Food's inability to delivery groceries to customers.
How can they get to places within an hour and make a worthwhile margin of profit?
>make a worthwhile margin of profit?
If Dominos can do it for pizzas, amazon can do it for much bigger ticket items.
PLUS they are not incurring the cost of shipping the item to a prime member. Right now for every physical good prime purchase they spend money on shipping.
Also see: Amazon is not worried about short term profit [1]
They have probably planned to not profit for a while in exchange for increased cashflow. Again for Amazon, profit isn't first, the customer is.
[1] http://www.businessinsider.com/amazons-jeff-bezos-on-profits...
If Dominos can do it for pizzas, amazon can do it for much bigger ticket items.
PLUS they are not incurring the cost of shipping the item to a prime member. Right now for every physical good prime purchase they spend money on shipping.
Also see: Amazon is not worried about short term profit [1]
They have probably planned to not profit for a while in exchange for increased cashflow. Again for Amazon, profit isn't first, the customer is.
[1] http://www.businessinsider.com/amazons-jeff-bezos-on-profits...
Dominos can do it for Pizzas because the profit margin on Pizzas is about as close to 100% as you can get, and delivery-person pay is about as low as you can get, combined with subsidy via tips. A $20 pizza will have a higher total gross margin than a $100 anything-retail.
Amazon is going to lose money on this, and it will probably only ever be feasible (even as a net loss) in a handful of zip codes in the US.
Amazon is going to lose money on this, and it will probably only ever be feasible (even as a net loss) in a handful of zip codes in the US.
That's exactly what I was thinking
They're charging $7.99 for one-hour delivery. That's about on-par with on-demand courier fees that I've seen in NYC. Presumably the two-hour free delivery will be phased out once they've reached some metric.
If we assume that a) the 1h delivery is break even for them and 2) the 2h delivery would allow the courier to do a couple of extra deliveries on the same trip, then I think the per item cost for 2h delivery could be only a couple of dollars, making it competitive with UPS and thus maybe free for prime members indefinitely.
$7.99 + you need to have $99 Prime.
Wouldn't four hours or anything same day be just as good? Why not save some costs there?
I think most purchases break down into "I need it now" vs. "I need it in a day or two." Currently, Amazon can't get the first category, so it's served by local stores. And four-hour or same-day delivery doesn't really address that market either.
Actaully, I often need something "before tomorrow". Unless I wait until 9PM to realize that, a four-hour delivery time would be perfect for me.
They already have this service, Amazon Fresh.
Can't wait to see how awesome the work environment will be for these couriers! Probably much like Uber's drivers: under constant pressure to meet a quota (in this case, probably minimizing the number of missed 1 hour marks), and if you're injured/hit/cause an accident, it's on you and the employer will be nowhere to be found.
More like Amazon's warehouse workers with constant countdown clocks, except on the open road. Which sounds like a potential hazard for other drivers.
Ever ordered a pizza? 1 hour delivery doesn't come close to any kind of realistic safety margin.
That depends: is the average distance between Amazon warehouses and recipients higher than the distance between a neighborhood pizza shop and it's customers?
Well 1 hour delivery leaves at least 15-20 minutes to actually cook the pizza. I suspect the fact that they're doing this one a few limited parts of Manhattan indicates that they have some kind of courier depots especially for this.
If they don't like it they can quit.
We tech folk would do well to remember that relatively few people have the good fortune of working in a labour market where demand outstrips supply. Being able to just quit with a comfortable buffer in the savings account and confidence that a better option is just around the corner is a rare privilege.
In a market where there is an oversupply of labour, a free-market race to the bottom results in significant suffering over a large number of workers while benefitting a small number of the already-wealthy. It is difficult to view this as a socially desirable outcome.
In a market where there is an oversupply of labour, a free-market race to the bottom results in significant suffering over a large number of workers while benefitting a small number of the already-wealthy. It is difficult to view this as a socially desirable outcome.
Are they outsourcing the couriers in this case? The promo video looks like as if these guys are sourced straight from a Chrome Industries / Rapha commercial.
This headline could've read: "Amazon relaunches Webvan".
Very interesting how ideas from the first bubble re: brick-and-mortar are coming back.
Very interesting how ideas from the first bubble re: brick-and-mortar are coming back.
Webvan wasn't the first ever grocery delivery service. Their failure doesn't make in non-viable, it just means they didn't do it in a viable way.
I still see the dairy truck and the Schwan's truck in my neighborhood from time to time. They're not exactly the same thing, but they've proven long-term sustainability for some parts of the market. I also see home delivery trucks for King Soopers (Kroger) and Wal*Mart in my area.
I still see the dairy truck and the Schwan's truck in my neighborhood from time to time. They're not exactly the same thing, but they've proven long-term sustainability for some parts of the market. I also see home delivery trucks for King Soopers (Kroger) and Wal*Mart in my area.
What most don't realize is that Amazon is taking on Fedex, UPS, and the USPS by doing it themselves for profit. This is actually very smart if you can solve the logistics problem long term because this model can be leveraged in many other cities.
Having the ability to pickup and deliver from multiple locations throughout a city like Postmates or Instacart does is a huge advantage. At least for a one hour delivery. Density of drivers in a city is an important factor as well. If you can route a driver to a location nearby instead of a single warehouse you can be more efficient. Instacart and Postmates also both have high frequency categories that they can use to leverage less frequent items, e.g essentials over time and potentially at lower costs.
Just heard about Shyp yesterday. Seems like it's the same idea but selling the concept of regular people helping each other for a more personal service (like Uber, Lyft). I kind of like that approach. http://www.shyp.com/heroes
Somewhere, Kozmo.com CEO Joseph Park is reminding someone that this is Jeff Bezos's second attempt at one hour delivery, and that he was already doing this for Bezos back in the 20th century.
He's actually at Forever 21, so I assume he's reminding them: https://www.linkedin.com/pub/joseph-park/3/710/a3b
Time to order KY lubricant and the Sports Illustrated swimsuit edition delivered to a bathroom stall at SFO...
(if you don't remember Kozmo, this was done by a reporter during the last dotcom boom/bust as a joke)
(if you don't remember Kozmo, this was done by a reporter during the last dotcom boom/bust as a joke)
Meanwhile in Canada...
I find it really weird that on HN, which in general I find to be a pro-capitalist, let-the-market-sort-it-out kind of place, so many commenters seem irked at businesses 'being cheap' by offloading waitstaff salaries onto tips. I'm just a simple country hyperchicken, but isn't this that 'maximizing shareholder value' stuff I've been hearing so much about?
First, "maximising shareholder value" is essentially a government regulation which many would argue is not "capitalistic" in the classic sense.
Second, one can both support capitalism as a system and dislike some business practices.
Third, there is no guarantee that offloading salaries onto tips will result in maximising shareholder value since it could result in less customers using the service.
Second, one can both support capitalism as a system and dislike some business practices.
Third, there is no guarantee that offloading salaries onto tips will result in maximising shareholder value since it could result in less customers using the service.
Amazon could just have OnTrac create a product called One-Hour Delivery, and have OnTrac claim that they tried to deliver but that the recipients weren't home.
I'm guessing this is not good for https://www.instacart.com?
The selection is pretty decent, definitely comparable to Google Shopping Express.
One very odd note though: they ask for a variable tip to the delivery courier (something Google doesn't do). So even for "free" 2 hour delivery, you're paying for delivery. While I see how this is better for the courier, I think it's a big mistake—people hate navigating the social dilemma of how to tip properly, and solving social dilemmas is a key advantage of digital services.