> The truth is that each of these is feasible for a large competitor to replicate and it’s reasonable to think that Walmart could build or acquire these capabilities within the next few years. The key component to profitable 2-day (or 1-hour) delivery is the customer’s proximity to a distribution center.
This is incredible. Walmart has free two-day shipping on orders over $35 right now, with no membership required, and yet people are still writing articles like this asking, "will it be possible for Walmart to get 2 day shipping within the next couple years?"
Because of the problems with third party sellers (combining different sellers into the same product page, comingling, fake reviews, etc.) it's getting harder and harder to buy stuff on Amazon, plus you need a prime membership to get fast free shipping. I've also had tons of problems with Amazon deliveries since they switched to their own logistics company. In comparison, Walmart is looking better and better by the day.
This isn't some day in the future, it's now. I'm seriously considering cancelling prime and just using walmart when I need 2 day delivery.
You missed the whole point of my post. I said specifically said Amazon's moats have nothing to do with things like 2-day shipping, which are easily copied. The FBA program, as one example, allows any Amazon seller to ship product to Amazon's warehouse, and then have that product be eligible for 2-day (or faster) shipping - with zero effort (and unbeatable fulfillment fees). That program - and the dozens of others like it - will be extraordinarily difficult to copy.
Exactly - and while that low barrier of entry gives Amazon a significant problem with fraudulent items and listings of dubious quality, it also adds a ton of breadth to the marketplace and makes something that actually lives up to the phrase, "The Everything Store."
As an example, I found myself in the market for a laser cutter recently. Consumer entries start in the low/mid 4-figures, and Glowforge doesn't appear to be right around the corner. So I figure, the best bang-for-your-buck option is to buy a cheap Chinese model and swap out the cruddy bits.
Now where am I going to get a cheap Chinese laser cutter, a nice open-source CNC controller board, and if things go hooey-shaped, a more robust power supply, ventilation, and/or cooling system? Walmart?
No, the alternatives to something like that are more along the lines of ebay. The turnaround time would be significant, and I'd still have to vet all of the listings I consider to hopefully avoid fakes. Ditto for AliExpress, and double for TaoBao. Amazon offers prime shipping on most of those items, though, and they have a decent returns policy to boot. The breadth of their catalog is nothing to sneeze at.
I would love some links on where you're doing your research on laser cutters. My wife recently suggested I buy one which is like, oh god how did this happen, I must make this happen as fast as possible before this opportunity goes away!
I kind of just googled around for information; there isn't a whole lot of well-collated stuff, so I definitely could have missed a better option, but it looks like if you're not going to shell out for a very expensive commercial/industrial unit or wait <undefined> months for Glowforge, you're probably looking at a K40. There's a pretty good wiki for it on the lasercutting subreddit: https://www.reddit.com/r/lasercutting/wiki/k40
You'll quickly notice that it's not a terribly good laser cutter, although it does come with the 40W necessary to be one and can be upgraded further. There are a variety of upgrades you'll want, but if your budget is $1K, the laser cutter itself will cost you less than half of that; they run $400-450 on ebay.
So if this were a Top Gear challenge, you're sitting pretty to improve your cheap lemon with your remaining cash:
* The default controller only works with Windows and the software it comes with is likely pirated. If you're used to working with 3D printers, get a RAMPS board and put Marlin or something on it. There are a few guides for going from there to more open control software, or even running off of an SD card with no PC.
* Ventilation. Apparently the stock fan doesn't fit that well, and there's no system to blow debris off of the bed when a cut is in progress. That could be a fire hazard and/or bio hazard since the dust from stuff like acrylic is not good for you.
* Cooling. It's water-cooled, with a small aquarium pump that you stick in a bucket of water. It looks like that's probably fine if you aren't going to run the laser constantly, but you could always get something with more flow.
* Some users say that you should ground the metal housing manually with a thick strand of wire. That's a mildly worrying piece of advice.
So it sounds a little hair-raising, but all in all it seems like a manageable risk, and the price is right.
Buy on TMall or JD or some other reputed seller not Taobao. If you are in China you use alipay or WeChat you are better protected then with amazon in USA. China's ecommerce eco-system is decade ahead of amazon model. So they can't even compete there.
I really don't think it would be that hard to copy. There are plenty of fulfillment centers out there already that offer similar services, API and all. Walmart could simply buy them and integrate with their own warehousing network and have Amazon outmatched in terms of facilities in a rather short period of time.
Amazon didn't invent the 3rd party warehouse idea. They were just the first 3p marketplace to offer it as an added value service.
There are ~2 million FBA sellers and roughly 42 million Prime-eligible SKUs - hundreds of thousands of inbound shipments. You can't just buy a couple of fulfillment centers (with their homegrown WMS software) and be off to the races.
For comparison, your average Wal-Mart distribution center has ~100k SKUs and one 'user' (Wal-Mart).
WalMart's marketplace (3rd part sellers) is just getting off the ground. Give it time... FBA is not a complicated beast like you make it out to be. As the Parent correctly pointed out, there's a plethora of companies that do nothing except fulfillment for distributors. There's nothing "hard" about copying the FBA model.
> For comparison, your average Wal-Mart distribution center has ~100k SKUs and one 'user' (Wal-Mart)
You seem to be deliberately comparing apples and oranges here.
You claim Amazon has 42 million Prime-eligible SKU's, and them compare that to how many SKU's exist in an average Walmart warehouse... forgetting that Prime-eligible SKU's don't all reside in Amazon warehouses... a 3rd party seller can warehouse that inventory on their own.
You also don't state how many warehouses Amazon has, nor the average number of SKU's in their warehouses, nor how many warehouses Walmart has, nor account for Walmart stores that serve dual purpose as warehouses. That makes your comparison useless, really.
At a point, it becomes sub-optimal to store more SKU's in a single warehouse, so they open a new distribution center and shuffle products around based on expected demand in the region (closer warehouse to the customer means faster delivery at less expense).
> You claim Amazon has 42 million Prime-eligible SKU's, and them compare that to how many SKU's exist in an average Walmart warehouse... forgetting that Prime-eligible SKU's don't all reside in Amazon warehouses... a 3rd party seller can warehouse that inventory on their own.
I'm not trying to be rude, but I think you have a misunderstanding of how third-party Prime eligibility works.
Virtually all Prime-eligible SKUs reside in Amazon's warehouse. That's how the FBA program works. There is a very new initiative called Seller-Fulfilled Prime (where the inventory resides in the seller's warehouse), but this is an extremely small percentage of the 42m SKUs.
> I'm not trying to be rude, but I think you have a misunderstanding of how third-party Prime eligibility works.
I work for a distributor and e-commerce retailer... we've been involved heavily with Amazon (both AFN and MFN) for about 7 years... I'm intimately familiar with how Amazon, Prime, FBA, et al work. Of course it's impossible to know everything about what Amazon does... but I am in the trenches, so to speak.
> There is a very new initiative called Seller-Fulfilled Prime
That's not new... it's been around for years. Big retailers have been doing it for a long time, as they already have their own fulfillment network (see my original post regarding companies that do nothing except fulfillment). It was invite only for quite some time... perhaps that's why you thought it's new.
Another thing you're not accounting for, is of the claimed 42 million SKU's in the Prime program... the overwhelming majority do not sell. This became such a problem, Amazon had to start charging for "dead stock" to motivate sellers to remove dead inventory or not send "slow-movers" in the first place.
You also didn't account for Walmart's drop-ship vendor program. Walmart will take an order, and you drop-ship it on their behalf (Walmart being your customer, not the individual making the purchase). Walmart doesn't need to store all the items in their warehouses...
Amazon has a similar program, but instead of you drop-shipping the items, they buy them from you up front and you ship the inventory to Amazon.
All this doesn't say Amazon's warehouse logistics aren't impressive... because they are... but the FBA mechanism is not something special, and it certainly can be replicated fairly easy (and already has been for the most part). What is unique is the fanfare Amazon receives for every new warehouse that's opened... most companies just open new warehouses as business-as-usual sort of things... no articles are written about those things.
Many thoughts on this. But they all come down to: it sounds like you think Amazon's current moat is trivial for Wal-Mart to overcome. Should be a few more months now and then Wal-Mart will start to take the ecommerce lead, then ;)
This seems to be a sort of excluded-middle error... there is lots of space available in between "Wal-Mart will never threaten Amazon" and "Wal-Mart already drove Amazon out of business". I'd suggest you just shop on Wal-Mart's site; you'll discover they have almost as many shoddy knock-offs for sale as Amazon have...
That's not what Alupis's comments sound like to me. It sounds more like they're saying that if Amazon wins it won't be because they had unique, impossible to reproduce logistics and fulfillment programs. It will due to other factors. (And there are lots of other areas where Amazon has an advantage over Walmart, not the least of which is brand.)
I don't think they're suggesting that Walmart will inevitably overtake Amazon in e-commerce any day now.
> I really don't think it would be that hard to copy
If it were that easy Walmart would already have it. FBA has been around for a decade. Walmart still doesn't have anything that comes even close to it, despite having an incredible dev team (Walmart Labs) a ton of money AND the distribution network to make it very feasible.
Why would FBA be hard to copy for someone like Walmart that already has the warehouse infrastructure receiving products from different suppliers? It sounds like it's literally just having a corner of the warehouse for their stuff, and applying the same shipping mechanisms already in place in the warehouse. The hardest part would be the interface for the merchants, but even then, Walmart would have most of that in place for tracking their own inventories and interacting with suppliers.
I think setting up the infrastructure for 2-Day shipping is harder than the merchant backend for supplying you with items to ship. Of course, Walmart already has 2-Day shipping on selected partner reseller accounts via the marketplace, so I'm not sure why you think they don't already have an FBA equivalent -- they're just smarter than Amazon about brand protection.
Which is what Amazon has blundered on, badly: they've created a lot of "Day 2" features that are clearly anti-consumer and it's tarnishing their brand, even as many of their metrics look good. Further, they've taken on a lot of the same anti-employee and anti-small-merchant measures that people dislike Walmart for.
That behavior loses them their real moats: customer trust and behavior distinguishers. If Amazon is just a Walmart with the reputation of AliExpress, why wouldn't I just buy off WalMart's website?
> Which is what Amazon has blundered on, badly: they've created a lot of "Day 2" features that are clearly anti-consumer and it's tarnishing their brand, even as many of their metrics look good.
Can you clarify what this means / give some examples of what you're referring to? I'm not sure what would a consumer-facing day 2 feature would be other than returns or shipment tracking, which I think they handle well--but I also just learned the term after looking it up upon reading your comment. :-)
It's using the language from the Bezos shareholder letter [0]. I recommend reading it, because I think the vision for how to run a company is very good, even if Amazon isn't living up to it.
Returns and shipping aren't "Day 2" features necessarily -- they can be part of a "Day 1" company.
Rather, my complaint is that Amazon has created programs like Fulfilled-by-Amazon (FBA) and Featured-Merchant-Algorithm (FMA) that are poorly implemented and anti-consumer:
1. Co-mingled inventories are a fundamentally anti-consumer feature, because they violate consumer control and mean that bad actors can impact the experience of buying from good actors, which undermines consumer trust. The only purpose it serves is simplifying the logistical problem for Amazon. The reason Amazon thinks this is a good idea is because they have converted to data-as-proxy thinking, where they no longer holistically understand consumer needs, they only optimize proxy values like delivery speed. The whole feature reeks of abandonment of Amazon's leadership principles [1] in order to optimize performance metrics. That's "Day 2" thinking in a nutshell.
2. The FMA is similarly problematic because of the fact it essentially hides a vital decision about purchasing from the consumer, and forces buying on Amazon to feel adversarial -- I have to doublecheck that Amazon isn't sending my business to a fraudster and they make it hard for me to control that, except for a small box I have to check every time. Here, Amazon failed to advance the market with new and innovative consumer tools that would allow customers to help police the market (eg, by crowdsourcing an optional fraudster blacklist). That kind of "Well, the data tells the whole story, let's just optimize our metrics" with opaque algorithms is a very "Day 2" way of doing business -- a failure to innovate is stagnation.
I could go on about these for a while, but the entire design of the Amazon marketplace is a stagnant mess -- it's no longer innovative, and their reliance on optimization to metrics has allowed people to game them, turning it into a quagmire of people trying to cheat the system (counterfeit, bought reviews, etc).
Amazon is devolving into a mess of their own making, by operating in a "Day 2" paradigm, rather than innovating solutions to hard problems.
I'm old enough to have been in the logistics industry when Walmart was king, and they said exactly the same things about Walmart - the company had the market power to force you to label your shipment a certain way, with certain bar codes, so your pallet would go straight into their system with no effort.
In the end it didn't really help them when Amazon came along.
No it won't, Walmart already has distribution centers galore and the $ to buy more. They do lack an external seller platform, and maybe that's not such a bad idea with the amount of fake crap one could get through Amazon...
Walmart already has an external seller program. Search for specialty/niche items on their site, and most of the time it's fulfilled by their "marketplace" sellers.
@zkanter If you think Amazon cannot be beaten just see Alibaba and Chinese e-commerce eco-system almost a decade ahead of Amazon. I am sure once Alipay get listed currently private, will leave amazon far behind.
Same day delivery on TMall like buy in morning get in afternoon was available 6 years ago in China. Now you can fly oysters from New Zealand, cod from U.K. and delivered to your home in 24-48 hours in China also 5 years ago. Amazon still has miles to sprint before it reaches there.
The CCCP deserves most of the credit there. The reason those services exist is because China has lower wages and much higher density over wider areas. Home delivery has been available for 20 years in parts of the US, but service areas are isolated because there isn't enough demand. Prime Now is still loosing money because there aren't enough people to break even.
That's exactly the program that got me off amazon. Shoddy goods, inventory commingling, and private label items. You never know what you're getting into. Not even bought "Shipped and sold by Amazon.com" items are safe now.
I've cancelled my prime membership and use a variety of sites now, and I couldn't be happier.
I've been in business for decades, and this is a repeating problem. We have feature X for years, nobody much cares about it, our competitor comes out with X and it's lauded as amazing and innovative.
Having a competent PR department matters a LOT in business.
I think one of the problems facing specifically Walmart is that their multi-decade long negative sentiment at the corporate and personal lives of the executives among social progressives that are strong among the "millennial" demographic in the US undermines a lot of the innovation that the company does.
Thus, if I were in Walmart's position, I would be spinning out separate companies potentially rather than even doing M&A to try to capture the market because I'm not sure if jet.com is really going to undo the damage.
About a decade ago when I was at HP one of the senior executives in the personal computing group was talking about how he demoed a touchscreen computer and people were pretty impressed and asking when it's going to be out and he was disappointed that nobody knew that HP had already released it. Combined with a completely unfocused company direction, anemic marketing budget, and continued obsession with trying to squeeze more money out of legacy markets (like most traditional enterprises TBQH) HP's reputation as a low end commodity OEM with mediocre software in the consumer verticals has been quite solidly imprinted and little will change that perception without clear, obvious direction change to consumers. And few businesses (and more accurately, their board of directors) have the guts to do that.
> I think one of the problems facing specifically Walmart is that their multi-decade long negative sentiment at the corporate and personal lives of the executives among social progressives that are strong among the "millennial" demographic in the US undermines a lot of the innovation that the company does.
Nah, that's limited to upper middle class millennial who can afford to "buy local" and buy fair-trade coffee. If you walk into any Walmart in the country you'll see a lot of millennials shopping there because it's cheaper (and in a lot of places its essentially the only store in town).
Absolutely. On the other hand, almost all of those customers are unaware that Walmart has free 2-day shipping on all orders about $35. Hell, I didn't know that until I read that comment.
The PR stuff still stands, the swipe at millennials is as unrepresentative as you said it was.
I haven't seen Walmart sell anything online but stuff you'd more or less find in their stores where Amazon is a funnel point for a zillion online shops and lets me buy from them without worry. Maybe Walmart's cultivated the complete equivalent of Amazon online BUT it's would be hard to convince people of it because what people think of Walmart as is pretty set.
Just as much, my own experience of Walmart's brick and mortar stores has been stuff of such low quality that it's effectively expensive even at their low prices - a place only those who are desperate would shop at.
And that's thing. Walmart has a huge PR hurdle to overcome because it's Walmart. Sure it has a huge base of customers but it also has a huge base of un-customers, of people would never, never touch the place.
So here, it's a lot more than whether they have X feature.
>I haven't seen Walmart sell anything online but stuff you'd more or less find in their stores where Amazon is a funnel point for a zillion online shops and lets me buy from them without worry.
The "without worry" part is maybe being optimistic. There have been a couple of previous hacker news discussions on the problem of counterfeit goods being sold by Amazon. The problem here is that if there are counterfeit goods being sold by a 3rd party, you might get them even if the product listing your ordered from says that it is sold and shipped by Amazon. Amazon co-mingles goods from Amazon and third party sellers unless the third party seller explicitly opts out of it (which costs more money for them and someone selling counterfeit goods has every incentive to co-mingle their goods with others). I don't think I have run into counterfeit goods, but others claim to have:
>"The "without worry" part is maybe being optimistic. There have been a couple of previous hacker news discussions on the problem of counterfeit goods being sold by Amazon."
Part of this also is that Amazon has very generous return policies. I feel pretty sure that if whatever I buy is generally bad, I can return it. In fact, I have a highly neurotic friend who returns thing constantly to Amazon and is generally able to do so.
As to counterfeits. for the consumer, this only matters if the quality is unacceptable (which reviews and returns take care of - at for me). For copyright holders, it's problem but that's what courts are made for.
>...As to counterfeits. for the consumer, this only matters if the quality is unacceptable (which reviews and returns take care of - at for me).
That is the problem here with Amazon. With comingling of products, it doesn't really matter what the reviews say since even if it says sold and shipped by Amazon it could be from a shady 3rd party merchant with counterfeit goods. A counterfeit battery will hopefilly just have a shorter life than expected, but if it something you consume, it could be worse and you may or may not be able to tell if it is fake. I like the convenience and selection of Amazon, (and have been a customer since they started) but until they stop this comingling, I feel I have to be a little more careful what I buy from them.
In Walmarts case, free 2 day shipping above $35 is not the same as prime. That's a lot less compelling. Also the yearly membership locks people to amazon to an extent.
i buy a TV at a random retailer. the tv breaks. i need to take the TV there, they send it to the manufacturer for repairs, 6 weeks later i maybe get my tv back.
a tv ordered at amazon breaks, they collect it, bring a replacement and deal with the problem themselves.
for me, and a lot of other people, amazon has quit competing on price. we buy there for the convenience, not because its "cheap".
Walmart is known for their generous return policy as well. 15+ years ago my roommate worked at Walmart customer service desk. She told me she was instructed to basically never not process a return. I don't know if it's still that way, I haven't returned anything to Walmart in probably a decade. I'm sure walmart.com would be similar.
maybe its like some other post in this thread said. maybe amazon isnt all that special in reality. but in our minds, it is.
shopping at amazon is seamless. even when you order something and then dont want it. i dont have to accept the package and then send it back, i just tell the postal person that i dont want it, they return it, amazon accepts that as a return and ships the money back without asking questions. not probing questions. they just dont ask. they do the thing i expect them to do without even bothering me with an email. it doesnt bother me at all. thats whats so good about it.
i get that thats first world problems. but hackernews IS about spoiled software engineers being spoiled.
amazon has this weird concierge service built in. it just works for me.
Are you european by any chance? We enjoy reasonable return policies by default - sure, Amazon adds a few benefits like extended return periods, but as a european you get the basic return options anywhere. Returning items without any questions asked isn't magical here, it's required and expected.
It is my understanding that the return policies in the US very much depend on the seller which turns Amazon into the shining gold standard, I guess.
This is true. You can return anything - obviously abused/ broken stuff, even items purchased from other stores. Items purchased from Walmart.com can also be returned to any physical Walmart location, no questions asked.
Yeah, my roommate said she processed returns that were obvious scams at the Walmart Service Desk but she still was still supposed to process them anyway. Guess they accepted the scams were a just a cost of offering a great return policy.
> Also the yearly membership locks people to amazon to an extent.
True, but I see that as a strike against Amazon. I was really pissed off recently when I found Amazon were selling the DVD/BD of a popular recent movie as a Prime exclusive; non-Prime customers can't buy it from them at all, unless they want to roll the dice on that wretched hive of scum and piracy which is the Amazon thirdparty market.
If Prime becomes effectively unavoidable, and Amazon's sticker prices get to amortize the Prime fee as "discounts", then they no longer have much of an incentive to compete on true price. As a customer, that's not even a tiny bit compelling.
> non-Prime customers can't buy it from them at all, unless they want to roll the dice on that wretched hive of scum and piracy which is the Amazon thirdparty market.
Doesn't Amazon use shared inventory between first party and fulfilled-by-Amazon third party sellers, so that the first party market is potentially as much a hive of scum and piracy as the third party market. I'm quite sure that's been raised as an issue many times with regard to counterfeits.
Do they really? That's horrible! It would also explain so much bad/strange behavior where Amazon gets caught selling fraudulent merchandise.
For a good example of this, look up reviews on CR2032 coin cell batteries sometime. In a nutshell, regardless of which brand you pick or who you buy from on Amazon, it seems you're very likely to get re-packaged and possibly counterfeit goods.
I mean, there are plenty of products that you can get at both Amazon and Walmart today, and you could get those at Walmart instantly. Prime just allows you to get that product from Amazon in two days, without worrying about the cost of extra shipping, the hassle of actually getting to a Walmart (traffic, parking, weather, etc.), having to wait for someone to go get it, etc. Amazon just pushes all those unpleasant 'wait' factors to the experience of the deliverer, not the receiver.
But "the cost of extra shipping" has to be offset against the annual Prime fee, and all the perks you list apply just as much to vanilla (non-Prime) Amazon.
In recent years I've found myself swinging back towards buying things in brick-and-mortar shops, mostly because the delivery experience can be so horrible. Maybe things are better in the US, but in the UK getting things delivered is non-trivial when you work during the day, and even if you're at home, it's very common for UK postmen to not bother even bringing your parcel with them; they just leave a "while you were out" card forcing you to arrange redelivery. Delivery woes of various kinds have been a staple of /r/britishproblems since the start.
I like to buy big/heavy items from Walmart.com. Buying a full weight set from Amazon would not have free shipping. I can have the heavy stuff sent to any Walmart store for free and go pick it up. And yes, Walmart.com has a huge amount of stuff that isn't sold in their stores.
Sometimes I wonder if the story really means, "competitor finally implements feature X, so they can switch away from you to get features Y, Z, and Q, which they've always wanted and you don't provide".
For instance, there's at least one courier in the UK that gives you a one hour estimated delivery window and a URL where you can check your delivery's progress live. I find this very useful, mainly because I don't have to sit at home all day waiting.
Amazon don't currently do this where I am; if they did I'd use it a lot more.
Amazon's equivalent service is called "Amazon Prime Now". Fewer products, only in select cities, and you can only order with a mobile app (not on the website).
No, it's not the same. What GP is saying is probably DPD, which texts you a tracking link on the day of delivery showing you when your parcel is going to be, and a 'guaranteed' 1hr delivery slot in the AM. So if it's going to be delivered between 6pm-7pm you don't have to sit in the house all day wondering if it is going to arrive.
I'm amazed more couriers don't offer the same service, because it is really good.
Yeh I was thinking DPD. Seems to have some bad reviews online but I've never had any trouble, the timeslot thing is accurate and is very handy indeed. The key issue IMO is that the buyer of these services (the merchant) doesn't care, and the buyer doesn't get choose the courier service so they there's no feedback signal force other courier to compete on this.
Ah, indeed that is very different. Prime now guarantees a delivery window of 1 hr (for a fee) or 2 hr (free for Prime members), and gives you tracking in the app (not a link), but delivery is same day, and you pick the delivery slot (if one is available).
Honestly, many people don't care exactly when their parcels arrive -- they can order it to work, or their concierge/front desk can hold it, or it can be left at their door/porch. And if you care about this sort of thing, it may be just as economical to move into "luxury" apartments that provide this sort of perk as it is to pay for something like BufferBox that provides a proxy of it.
> just as economical to move into "luxury" apartments
Come now; choosing where to live is a complex balance of pros and cons for most people, I can't imagine many having this anywhere near their list of priorities.
You're so right but I think this problem has more to do with poor news reporting. For one, people like to read about companies they know, good or bad. Press releases always herald a feature as innovating even if competitors have it. Press companies will practically write the articles for journalists. It's much more time consuming to check the facts or, more importantly, the features of competitors, so why to bother when their goal is to drive impressions.
This is a great example of a challenge that every business faces - if the customer doesn't know about your product then it doesn't matter how good it is. You can't sell to someone if you've failed to communicate your product to them in a way that they understand. In this case Walmart has a product (2 day delivery) that customers don't know about, which means Walmart completely fail to compete with Amazon for customers who want that service.
If you can't communicate your product well enough to the customer then the product effectively doesn't exist as far as that customer is concerned. This is why sales and marketing are really important to a startup.
This is a prime(!) example of a really powerful kind of first-mover advantage. It will be difficult to overcome with communication or advertising.
I remember Amazon's policy, like millions of others, because of a little shot of dopamine in my 20s. Amazon was the first to do it; we all discovered it and it seemed like a bit of the future.
I've used Wal-mart shipping, but couldn't tell you what the policy is, because it didn't strike me as new or unusual when I ran across it. I'm not sure you can communicate out of that hole in my cohort.
(Now, you might change my behavior if you convince me that Wal-Mart is better about weeding out counterfeits; that's new information).
Maybe make some commercials? "Yeah, we've got free 2-day shipping, and you don't need a membership. Or we have 1-hour pickup. How close is your nearest river?"
Others have said it, but Amazon's free two-day shipping with $25 (or was it $50?) purchase felt nearly magical.
As a student, I could take a $40 cab ride, or spend all day Saturday on train schlepping a shower curtain from Bed Bath, music from Best Buy, and a cheap dorm fridge from Wal-Mart. Or I could order it from Amazon at competitive prices, and it showed up on my door step in two days. Amazon was the equivalent of finding entire extra days in your schedule.
(Note, Prime came later. The original magic was two-days, $25 minimum, no membership.)
Assuming we're talking like 10+ years ago, it was the hassle free speed of ordering, the cheap, fast deliveries (and accurate delivery time estimates), the product selection, the live inventory and ease of returns. Compared to everyone else doing e-commerce at that time, Amazon was in a league of its own (at least in the UK).
You're not paying money to shop; you're paying money for shipping and unlimited access to their video library (and a bunch of other stuff, I'm sure). I'm not sure what the average shipping cost is, but if it were $5 then you should get Prime if you are going to buy more than 16 things from them.
I think he is specifically talking about the free two day shipping that came with a relatively low minimum purchase, not the free two day on any purchase via prime subscription.
Super Saver shipping was never 2-day, it was always 5-7 day, at least since 2002 which was the first time I've ordered from Amazon. Prime also started at $80/year, I looked it up. Paying $80/year to get my items slightly earlier sounds like a terrible deal.
In the context of students, Prime Student is 50% off. It appears to still be that way. This built up a lot of loyalty for early Prime members who were students. That loyalty appears to have continued for close to a decade for many people.
Remember that way back when it was business as usual to pay $10+ for shipping if you bought online. This meant that if you bought online more than 4 times throughout the course of an entire year, you were ahead. It also allowed you to buy at any time without worrying about the minimum purchase total, increasing buying frequency.
This is sad--you people need to come to grips with your materialism and cut...that...shit...out. There's nothing you can buy that will actually make you happier. I'm just as guilty as anyone, quite honestly, but am trying to get better. I look at my neighbors just filling up their houses with shit they don't need. Yesterday, I was driving through a neighborhood and lo and behold there was a house with two full Bagsters out in front full of--you guessed it--shit they didn't need!
I wonder if I can order a Bagster on Amazon? Ayup!
You know that Amazon sells stuff other than materialistic bling, right? I mean, I buy soap and toilet paper and stuff like that on Amazon. No, that doesn't make me happier, but it makes my significant other happier which I guess in a round-about way does make me happier. :shrug:
Even worse, it isn't a journalist making the mistake, it is someone patting themselves on the back for having unique insight into the advantages Amazon has over competitors.
I had no idea. Last time I used Walmart.com (maybe 5 years ago?), I had the option of in-store pickup if it's available, ship to store for free if it's not (sometimes takes several weeks, what's up with that?) or shipping to my house (5-7 days).
Maybe the problem with Walmart is they have a toxic brand for a certain market segment. Even with free same-day in-store pickup, I would still use Amazon's two-day shipping in order to avoid going into my local Walmart.
You should try visiting some rural/small-town Walmarts. They're actually quite nice. The ones in urban areas I've been to look like war zones: stuff scattered all over, shelves half-bare, everything dirty, etc. The ones I've been to in rural areas are very nice and decent. Sure, the store's full of Trump voters but they generally keep to themselves, but more importantly the stores are clean and well kept-up from what I've seen. Also, the customers in rural Walmarts are a much better crowd: in urban areas, the customers are the bottom of the barrel, people who are too poor/cheap to shop at Target or better. In rural areas, everyone shops at Walmart because that's all there is. So not only are the poorer people there, but all the local doctors, lawyers, dentists, etc. are shopping there too, so the clientele overall looks decent, instead of a caricature of the "peopleofwalmart" website.
I currently live in a small mid-Atlantic town, and shop at Walmart for groceries because the nearest Target is 30 minutes away. Sure, there's some annoying customers sometimes with monster trucks or T-shirts with guns on them, but I don't feel like I'm going to be mugged. When I lived in northern New Jersey, that's exactly how I felt, so I didn't go to Walmart if I could help it. (But the nearby Target was great, so that's where I shopped for that kind of stuff.)
There's also ShopRunner that comes free if you have an American Express card. You can use ShopRunner at a bunch of places like NewEgg, Drugstore.com, PetsMart, and more. Free two day shipping.
And the amazing thing about it is it includes a lot of the basic foodstuff staples that amazon doesn't carry, or adds a hidden $4 shipping charge to. Compare the price for a low-end shaving cream at Walmart and Amazon. Walmart: $1.75. Amazon only has them at $5 each, or in a 6-pack for $13.
To be fair you can often get free delivery on a ~$7 item on amazon, and that difference between firing off 1-click purchases on amazon whenever you want vs saving up a list of 5 things you need so you can hit the delivery minimum is a big qualitative change in how I buy stuff online. Reminds me of the difference of having to keep a running total of which friends owe money to whom because no one has the right amount of cash vs Venmo-ing immediately to settle any purchases.
On the other hand, sometimes that $7 Amazon item would be a $3 item at CVS or some other store and you really are paying the full cost of shipping, it's just hidden from you.
I think it's important to remember what's good for the customer isn't necessarily good for the business. There's a reason the $35 minimum is in place- because for orders totaling less than that the business is likely losing money.
firing off 1-click purchases on amazon whenever you want vs saving up a list of 5 things you need so you can hit the delivery minimum is a big qualitative change in how I buy stuff online
Couldn't agree more. I stopped my Amazon prime membership and now almost exclusively use Target and Walmart. Both offer free shipping for orders >$35 without a membership. And most of the items I buy are cheaper at Walmart and Target. I find Amazon to be overpriced.
> And most of the items I buy are cheaper at Walmart and Target.
Even used products aren't cheaper on Amazon. Ebay's usually cheaper (and, these days, maybe more trustworthy) and for books in particular both Abebooks and Alibris are usually cheaper, even with shipping, and sometimes way cheaper—which is weird, since Abebooks is owned by Amazon. Blindly using Amazon is a great way to be ripped-off. One cannot trust their prices or products, at all. Even non-tech-savvy relatives are starting to catch on that whole categories of products ought not be purchased on Amazon, ever.
If you want to see a ripoff just look at prime pantry. Most of those items you can use clicklist on and pickup same day at a Kroger store. Walmart has the same as well.
If you can easily get to a Kroger or Walmart and don't mind this errand, I don't think you're the target market for Prime Pantry. If you live in a city without a car, lots of things are either less convenient or more expensive. The grocery stores themselves are expensive, and if I'm going to have to walk or Uber home with my groceries that adds an extra hassle or cost. At that point something like prime pantry can be very worth it.
I get that, completely fair use case. There's Jet.com as well and no memberships and free shipping (opposed to the 5.99/box) prime pantry charges. Target does some things on a subscription basis that beats out amazon pretty much across the board too.
For books, if you're ok with older books, and don't mind if they're occasionally a little more beat up (but the condition classifications are usually accurate), thriftbooks.com is addictive. Super cheap books, and the first time I saw "free shipping in the US over $10" I went right ahead and spent $200.
Maybe so. But I recently was shopping for a piece of furniture at Target. Great price, not available in store. So I went to check out and it told me allow 7-10 days for shipping. I then typed the product into Amazon and found the same product for 30 dollars more. But it would arrive tomorrow.
For certain items definitely, and it pays to shop around, but you can get some incredibly steep discounts at Amazon if you're willing to wait and use a price watch tool. I routinely get non-essentials at a 25-50% discount because I'm willing to wait for Amazon's pricing algorithm to do something strange.
> I've also had tons of problems with Amazon deliveries since they switched to their own logistics company. In comparison, Walmart is looking better and better by the day.
Complain. Call Amazon customer service and let them know what you think. This benefits you in the short term (they'll pay you for your trouble) and the long term (enough complaints, even Amazon will respond).
I ordered an air conditioner right before a big heat wave where I live last summer. I also subscribed to Prime at the same time to get the free shipping, because I figured why not. Here's why not: when they completely dropped the ball and never gave the air conditioner I ordered to the shipping company, their bright idea to make up for it was to give me a free month of Prime. Hooray.
Honestly, do you believe your complaints will get passed the call center worker in Banglore who doesn't even understand the problem up to someone who can do something other than give you a free movie rental to shut you up?
Do you honestly believe that complaints are not classified and plugged into some sort of analytics system at the absolute minimum? I could never imagine that any company with half a clue would not be trying to quantify their support requests in some way.
Amazon doesn't seem to have a clue. My experience with Amazon as a third party seller is they run their operation like a trainwreck. I'll give you just one example. Once I shipped a box of commingled items to Amazon's wearhouse. It was received, checked in, and I sold all my inventory quickly. A month later I started randomly selling more inventory without restocking. How could this be? I ran though my reports and figured it out. My inventory was checked in a second time. Amazon didn't even have a database constraint to prevent that. They gladly sold all my "inventory" a second time and paid me for it. It's been two years, nobody has noticed.
>I sent in 14 [items]. 14 were received, 1 was lost and 1 was found. How many should have? 14. How many does Amazon say I should have? 11. How many units do I actually have? 9.
I stopped selling expensive items on Amazon. Every single time I listed one I got 10+ messages a day from scammers. I reported all of them to Amazon but their report button seems to go to /dev/null. They just don't care enough to filter out the obvious scammers. I then got my seller account dinged for marking too many messages "no response needed." So I got dinged for not replying to scammers.
Here's another take on some of the unresolved problems with scammers on Amazon and why it's not taking action
Hey, the way Amazon treats third-party sellers is a topic I've reported on a bit. [1] I'd love to talk to you about your experiences! My email is smann@inc.com — please get in touch if you're interested. Our discussion can be off-the-record if that's what you're comfortable with.
This was true for amazon years ago but these days just just say too bad. And maybe if you're lucky they'll give you more prime. I wouldn't consider that paying me for my trouble.
When they used DHL in the US, I complained about how bad DHL was for a few reasons. I was told that they would log my complaint, but there was nothing they would do until enough complaints had been logged.
A few months later, Amazon no longer used DHL. (At least in my area.)
So it does matter if you complain about their systems.
I live in Berlin and that got me to thinking that maybe I should research available services from shops here.
AFAIK in Berlin there are multiple choices available. It seems that almost every discount brand and Kaufland have delivery service. As my German is pretty weak I can't find a comparison between them. I think that probably Lidl and Kaufland should have the widest assortment.
Could anyone tell me their opinion about all these?
Lidl does not deliver groceries to your home. If you want a wide assortment, another option would be Bringmeister:
https://berlin.bringmeister.de
(Shameless plug - I work at EDEKA, which recently bought Bringmeister)
This is incredible. Walmart has free two-day shipping on orders over $35 right now, with no membership required, and yet people are still writing articles like this asking, "will it be possible for Walmart to get 2 day shipping within the next couple years?"
Because Amazon's is called Prime and is described as "free shipping". You can tell your friends about it!
"Oh man, have you heard of Prime? You have to get it. It's free shipping on everything!"
Wal-mart's doesn't have a name and is described as "two-day shipping included if your order is over $35."
There's no equivalent quote because I'd probably never mention that to a friend.
I wouldn't bring it up for no reason, but if someone was droning on and on about how Amazon Prime is the best thing ever, I'd certainly mention that Walmart has the same thing but free, and then have a discussion with them about how it is or isn't the same thing , but you have a very good point about branding.:)
Anecdotally (I know, I know), I've ordered a few things recently from Walmart that were cheaper than they were on Amazon. Each time I received the items multiple days later than what the website told me. e.g. "2 day" shipping taking 4 business days. I've had this happen to me maybe a couple of times over several years from Amazon, but its happened each and every time from Walmart.
> Anecdotally (I know, I know), I've ordered a few things recently from Walmart that were cheaper than they were on Amazon. Each time I received the items multiple days later than what the website told me. e.g. "2 day" shipping taking 4 business days.
Meh. Amazon does that to me (yes I have Prime) ~1/4 of the time too, and I don't live in the sticks. They also don't use any of their weird non-FedEx/UPS/USPS handlers here. "2 day shipping" becomes 4-5 business days. At least if Wal-Mart does it I haven't paid a membership fee for the privilege.
Amazon does that now as a matter of course - maybe I just manage to order obscure Prime items, but it's common to see the order summary show a date > 4 days out, while having the Prime 2-day shipping also checked.
Same here. It's been a bit disappointing. I've been considering canceling my Prime membership, especially since I don't use any of the other Prime perks. But I'll wait this year out to see if it improves.
Hah. Imagine the press if they were as customer-centric and data-driven as they are portrayed, and they proactively sent compensation based on their errors of estimation (i.e. customer expectations).
That's horrible business practice, you always count on a certain number of people dropping out, not noticing, and not caring..... it's kind of like overselling seats (free revenue)
They don't do that anymore. They just say "two days is the time in transit not counting weekends" (despite them absolutely delivering on Saturday and sundays.
> This is incredible. Walmart has free two-day shipping on orders over $35 right now, with no membership required, and yet people are still writing articles like this asking, "will it be possible for Walmart to get 2 day shipping within the next couple years?"
Free shipping on orders over $35 is useless in the same way that I find Amazon Prime Pantry useless. If I am trying to buy something, I don't want to fish around finding something else to get my order up to the limit. It's a ton of friction -- "do I need to add a pack of socks to this order or should I just pay shipping" -- when with Amazon I just order that book I saw mentioned on Twitter and don't think about it.
I have given Walmart a fair chance on a number of occasions. I received damaged and used goods for my trouble. The store gave me a huge hassle when I tried to return the items ( i.e. a PlayStation that had been smashed to pieces ), they treated me like I was a scammer/criminal.
> The truth is that each of these is feasible for a large competitor to replicate and it’s reasonable to think that Walmart could build or acquire these capabilities within the next few years.
This sounds like the way we talk about other nations developing nuclear weapons.
Same here. I am considering cancelling prime too. Amazon is still pretty cheap. But I found the stuff on Amazon has low quality and I had to return stuff too often. Great to see some competition from Walmart. I am going to try it out definitely.
Second this. Walmart is definitely milking their brick n mortar advantage here and Amazon even followed suit, they used to have free shipping w/out Prime for anything over $55 or $50 I think, then as soon as WalMart did > $35 for free shipping, Amazon followed suit.
If anyone can derail Amazon at what most people need, it's Walmart. Obviously, WalMart isn't a tech outfit like Amazon, but with a few choice acquisitions (e. g. Jet :), and ramp up time, they will certainly have Amazon wondering what hit them really soon... Walmart needs to do a better job of advertising their online offerings though.
I have already done this. The Walmart web experience is miles ahead. Amazon customer service has declined, where I have never needed to contact Walmart customer service for web orders.
I wonder how long it will take people to see this, but Amazon prime really isn't the proposition it once was. If you ask any Amazon employee they will tell you that you get free shows, music, books, etc. But I just want my orders to show up at my doorstep in two days. As you said, this is incredibly hard to do with Amazon prime in its current state.
I actually cancelled my prime yesterday after their support essentially shrugged me off for asking why a prime package was taking almost a week to deliver. Would have had the item by now if I used Jet or Walmart, or just drove to a real store.
And you nailed it, it's becoming impossible to actually shop on amazon. It's filled with products that keyword stuff titles, are blatant knockoffs, etc.
> So let’s imagine Costco is selling a pack of 10 bags of Doritos for $10 — or $1 per bag. Amazon’s algorithm notes that one bag is $1 at Costco and, in turn, lowers the price on Amazon of a single bag of Doritos to $1.
> That is a great deal for customers — something that is likely driving the decision at Amazon, where an obsession with customer value dominates its strategy.
> But now, Amazon is selling individual items at Costco prices while not getting the same wholesale price that Costco enjoys. In short, it’s going to be really hard for Amazon to turn a profit on those goods.
Amazon has free two-day shipping on orders over $35 right now too, but they also let members get unlimited two-day shipping on tiny orders. I just placed a single order for a hard to get $10 item a few minutes ago on Amazon.
The other thing is, can Walmart do same-day delivery?
True! I don't like visiting walmart in person, but free shipping with a $35 order is incredible. I keep adding items in my cart as needed until the total is $35+ and get it within 2 days. The corresponding free shipping on Amazon is 5-8 days.
My experience has been quite the opposite. Amazon's reliable and fast delivery alongwith its amazing customer service have been 2 key influencers in me spending 10,000s of dollars every year there. I have a habit to check Amazon first for any item I want to buy and if I can't find it there (or sellers who are part of Prime fulfillment), only then I venture out to another site or, most probably, buy it from a retail store.
As I mentioned, my default shopping destination is Amazon - except for grocery and clothes. So this pretty much includes most of our transactions including electronics for a family of 4.
I've had many problems with Amazon as well. If I buy a physical good from their website now, my operating assumption is that I will not receive it and will need to ask for another one (which I also likely will not receive, then cancel the order).
So, I better really want whatever that thing is, in order to put up with the current insanity of dealing with them.
Walmart is the way to go. I've stopped my prime a long time ago. Amazon needs to spin their video on demand stuff into a separate service, not force those costs on their prime users.
But can you get the shipping service separate from the video? I am not interested in a lackluster library of videos, not do I need access to yet another cloud backup, I would gladly spend $40/year on only 2 day shipping membership.
You likely can't because the marginal cost of providing shipping is 100%, while the marginal cost of providing access to a shitty video library is 0 (or close to it, at AMZN's scale)
Since shipping is the main cost driver here, Amazon is unlikely to offer you such an advantageous a-la carte deal.
TL;DR: The OP says Amazon's key advantage over all competitors is that the company's internal operations -- from server provisioning to database storage to inventory management to fulfillment to call-centers -- are also sold to external users as services, forced by competition to remain highly competitive on quality, features, and cost efficiency. No other company has made its entire infrastructure available to the world as competitive services in the same way.
It's compelling, but the switching costs away from AWS are quite high, aka good ole' vendor lock-in. I'd love some new EC2 instance types that don't force me to use EBS for root, but the switching cost away from EC2 is so high that, sigh, whatever.
If there were a drop in replacement for EC2 that didn't force me to use EBS for root, I'd switch in a heartbeat, but because of vendor lock-in, EC2 doesn't have to compete on quality, features, nor cost. It's simply because switching is (currently) too expensive. This is a feature that I, a customer, wants; the reason I want this is besides the point. To borrow from the auto industry, you can have use root, as long as it's EBS.
Pretending Amazon doesn't use vendor lock-in to it's own advantage like every other company, and thinking that it really competes on quality, features and cost ignores the huge inertia of saying on what works.
Private, back-room, "don't tell anyone else I gave you that good of a price"-type enterprise sales tactics for "at-scale" pricing don't engender trust either. Great for business; not for encouraging competition.
Yeah but few people do that because building massive infrastructure on top of EC2 instead of using Amazon's managed alternatives is a great way to lose money, not just on the AWS bill itself but also on needless additional work for your architects.
Defeating vendor lock-in requires the development of sound cloud-resource primitives, and probably some regulation on part of government to not pay egress costs when switching to a competitor (since the high cost of moving your data to another cloud is anti-competitive). But nobody has come up with decent primitives because, you know, if AmaGooSoft don't need multi-cloud architectures for high availability, then why do you think you do? And government won't step in because none of the regulators understand how any of this works.
Amazon are ruthless entrepreneurs, making every deal they can. If someone else opened up their internal services, nothing special will happen.
Making your distrubutors fill your warehouses without paying them, since you have relabled the business relationship and adjusted the margins somewhat, and getting away with it because you more or less own the market - that's the sort of deals you need to make.
this is the kind of stuff you learn in business school, but bezos has the resources and the wherewithal to execute on it.
verticalization is tantalizing for the promise that you can (1) capture existing value surplus (profit) and (2) consolidate services to reduce costs further. this gives you more operational margin to work with.
but as the author says, often stagnation and complacency swallow those savings over time. so then, rather than a value chain service being locked into a single customer, amazon makes internal services compete externally, and prove their value financially as well as operationally. not only that, but those services must keep pace with industry innovations to remain competitive over time.
this reminds me of the case of the chinese refrigerator company haier remaking itself into a global consumer electronics brand in part by implementing an internal market value chain mechanism to ensure a similar competitive instinct. each step in the value chain (down to the person) was evaluated for the value they produced and rewarded accordingly.
people derive more satisfaction and work harder in a more competitive environment, although you can go overboard and end up creating a cut-throat one instead. as always, balance is key.
>The level of discipline required to operate a multi-tenant, externally facing service like FBA yields tremendous benefit to the Amazon’s internal operation — this isn’t some hacked-together, homegrown tool that is hard-coded to Amazon’s own needs and thus nearly impossible to improve.
Did this guy just say FBA is impossible to improve? Is this a comedy piece? FBA is garbage, we (third party sellers, at least me) only sell on FBA because that's where the customers are. FBA is like an abusive boyfriend you can't get away from. Sure, Amazon will reimburse you when they lose your inventory (which they will do, very often) but you have to watch your inventory like a hawk because they won't tell you your inventory is lost. That's assuming your shipments even make it into your inventory in the first place after arriving at the wearhouse. Ive heard of big time FBA sellers having to hire someone to do nothing but resolve inventory discrepancies full time. Seller support barely speaks English (unless you can get a supervisor, which I was able to do once by making enough of a stink) and doesn't understand what your problem is. Of course they take 3 full days to not resolve your issue. No legitimate seller commingles inventory anymore because then Amazon will send out counterfeits to your customers. It absolutely WILL happen to you at some time if you are commingling for enough time, no exceptions. Then you have to hope Amazon doesn't kick you off their platform for their own incompetence.
He's saying that a hanky, internal tool would be impossible to improve. He also says that because Amazon sells to 3rd parties, they are driven to improve. So he's claiming that Amazon is structurally setup to solve problems, while internal-only products aren't.
The claim is that it benefits Amazon, not that it benefits sellers. I have no trouble believing that the FBA seller experience sucks, but since Amazon is where the customers are, I see no reason why the FBA seller experience sucking makes a meaningful difference to whether FBA benefits Amazon.
I had a half hour debate in my head on this topic the other day; this is a great post thank you! I work at Walmart HQ and I think people underestimate their size and don't always consider what position that puts them in. They are investing heavily in private brands from grocery to apparel which will drive margins up continually over the next decades. I have heard that they are investing in some pretty crazy stuff to enhance the in store experience such as VR. We are actively cutting billions of dollars of inventory (I work in the supply chain) They are really taking a look at internal operations and reworking the organization the perform at a higher level. I don't know much about Amazon operations but I have a friend who is a vendor and he said they are a bad business partner while Walmart is a great business partner. Anything Amazon does with pricing Walmart is doing the same thing and we can push lower and that will not change for a decade. I don't think one or the other will "win" although most other retailers will die out. Amazon will get a big piece of the pie in the future but Walmart will never die, people love low prices (Walmart is synonymous with this) and customer service is going to be top notch at Walmart in 5 years as we invest in training, stores and wages.
I am sure Walmart has lots of advantages but many of the things you are saying are speculative.
Maybe VR can enhance shopping experience. Sounds like basic research though, so not a competitive advantage yet.
Looking at internal organization is great, but again not a competitive advantage. Every org should be reviewing internal structures and efficiencies.
Your friend likes Walmart better than Amazon. I'm sure for valid reasons. But it's a third hand anecdote at this point without any details.
"Anything Amazon does Walmart does the same thing" seems disingenous. Their cost structures are different. The customers are dofferent. There be different strategies in pricing. Some will be copied, but Walmart can't copy Amazon's pricing models wholesale.
"Customer service is going to be...in 5 years"... Maybe. Maybe not. Why hasn't it happened yet? What has changed? Will this new directive overtake whatever cultural forces led customer service to be what it is now?
I'd be interested to see some analysis that goes deeper.
... as we raise our costs to service the dwindling market of "people without a computer and stable home address."
It is astonishing that Walmart HQ still thinks that the internet is a fad. No person with a viable alternative desires to visit a physical Walmart store. It takes time, requires overcoming a variety of frustrations like traffic, parking, bewildering store layouts, and then you never know if the item you want will actually be present at the location. Compare clicking a button and having the item delivered to your door.
> Walmart will never die
The truth is that Walmart is already dead. They are too far behind to ever catch up, and it is clear that "HQ" thinks that bolting an "e-commerce solution" on to their existing systems will keep them competitive, when in fact the entire organization has to be rebuilt from the ground up to even have a chance. That isn't going to happen. Walmart will soon be joining Sears and Blockbuster.
> No person with a viable alternative desires to visit a physical Walmart store. It takes time, requires overcoming a variety of frustrations like traffic, parking, bewildering store layouts, and then you never know if the item you want will actually be present at the location. Compare clicking a button and having the item delivered to your door.
You likely haven't been to too many Walmarts, especially in rural areas without a real Main Street / town square. People congregate there and eat at the food court or just hang out. Being able to get an item immediately instead of waiting two days is convenient. Most people don't buy a specialty item, they buy conventional merchandise that is more or less guaranteed to be in stock. Many communities have Walmart as their exclusive grocery store.
The complaint about traffic and parking (Walmarts have ample parking in all but the more urban locations!) shows that your perspective is that of a large city with ample public transit, not the more representative American locale. There's no Walmart in Manhattan, but there are two just over the bridge in Jersey. Most Americans live in a semi-urban, suburban, or rural place.
No one thinks the internet is a fad at HQ and you have no basis for that. We just bought a 3 billion dollar online retailer and put their CEO in charge of Walmart.com and online strategy is a part of every weekly buyer meeting in the company.
No time in the near future will people not shop in person, the online market is under 10% and people like to shop in person.
Product prices will not rise with internal labor costs; our product flow is currently not optimized which adds a lot of labor that you do not see. As that changes those labor will shoft to the store floor and create a better customer experience. Combine that with procate brands (higher margin) and your overall margin will continue to drop.
If you think someone is far behind in any online business you are underestimating how quickly those things can turn around in a massive company with tens of thousands of people working on the problem.
> you are underestimating how quickly those things can turn around in a massive company with tens of thousands of people working on the problem
I know exactly how an aging, entrenched bureaucracy rewarded for in store sales will react to a new online bolt-on that will "steal" their sales. Ongoing sabotage that cripples the upstart. Very few companies can make transitions like this where a new part of the company must cannibalize the old. Walmart has shown no evidence of even recognizing the kind of transformation they need to make.
>The survey, now in its fifth year, polled more than 5,000 consumers who make at least two online purchases in a three-month period. According to results, shoppers now make 51% of their purchases online, compared to 48% in 2015 and 47% in 2014.
1. They're only polling people who make online purchases.
These innovations are not widely publicized. Perhaps it would be beneficial to all if people could learn about new innovation at Walmart as easily as they can about Amazons. I wonder why the two are different in that department?
Amazon, by virtue of their newer business model and high growth, is a naturally good candidate for a news story. Most journalists are going to report about things that readers are interested in. Readers are interested in hearing established narratives that connect dots together and confirm their world view.
It is getting increasingly hard to use amazon. The risk of getting bogus goods is getting higher and higher.
Even when your order is "shipped and sold" by Amazon it can still be bogus because amazon mixes the 3rd party seller parts into the pool.
I got shipped a clearly inferior 3rd party generic version of what I ordered. Amazon took it back, but support could not guarantee I'd receive what was presented on the website. I ended up buying it for slightly more from a brick & mortar just to guarantee I at least got something branded correctly.
This is only going to get worse until Amazon is no different from ebay for garbage. With my recent experience, "shipped and sold by Amazon" is a meaningless distinguishing marker now if 3rd party sellers are involved in selling the product.
I feel like Amazon has gotten harder to browse, lately.
I'm moving and need to buy things to replace what I used to share with roommates in the kitchen (various utensils and tools). It's become extremely difficult to answer a simple question like "what's the best cooking utensil set?", due to shitty third party products, unclear descriptions, incredibly polarized reviews, and sponsored items taking the "top" listings.
I needed maybe 5 different products, which I reflexively assumed would take maybe 15 minutes of clicking around, but instead it took almost 90. Ironically, I would have been better served popping over to the Target around the corner, where at least I can see the size / quality of what I'm buying.
>I feel like Amazon has gotten harder to browse, lately.
Amazon has a "problem" with private labels. It's so so so easy for Joe Blow in Kansas to create a private label product and get it shipped directly to Amazon's wearhouses. So Amazon is overrun by them, which makes it difficult to find anything in the mess. On top of that, since most listings are created by third party sellers, listings vary in quality and can be very inaccurate. All this makes it close to impossible to compare items. Top it off with Amazon's sorting feature being entirely broken, it can really be a mess to try to browse. eBay actually offers a better UI in that regard.
It was pretty short sighted on Amazon's part to let this happen, IMO.
Amazon actually CAN improve in this regard, all they have to do is require third party sellers to complete the listing and also have a human review the listing for quality and accuracy. Just that small step would improve the customer experience drastically.
With all that I don't really understand why people still use Amazon anymore other than out of habit.
Sort by rating you say? Sure, here's 3 pages of sketchy, out of production, third-party seller items with one 5-star review, followed by the 4.97 star item with 3,880 reviews that you actually should buy. Enjoy!
This extent of euphoria would make me nervous if I were an Amazon shareholder.
Yes Amazon is a great company and productizing all these different parts is an excellent idea. I agree that it is their most important moat.
But Amazon is astonishingly mediocre at one key task: Helping customers find, select and configure what they want.
Amazon is not a good fashion retailer. Amazon is not a good electronics retailer. Too much information is missing or incorrect, the product range isn't nearly big enough, configuration options are almost non-existent and there is zero innovation on the presentation side.
In other words, Amazon is not a good specialty store. It's actually a pretty bland supermarket when it could be so much more.
I was surprised that they killed off Endless[1], the dedicated shoe shopping site, rather than turning it into a subsite or skin on Amazon; I was expecting Amazon to create more category-specific UI, but very little of that has happened. Maybe the categories are too hard to define? Maybe it gets too hard to move the underlying platform forward when you've got 20 forks of the UI to maintain?
[1] Though it makes sense after the acquisition of Zappos that they didn't want to have 3 shoe stores. Or does it? You'd think running a separately branded web front-end would be cheap.
That mirrors my impression as well. I like Amazon for their fast and certain next day delivery, but I only go there when I already know what I want. Research and discovery definitely happens elsewhere. Amazon is simply too cluttered, lacking curation and in-depth information. Customer reviews are useless to me as well - I prefer to gather opinions from niche forums full of enthusiasts and experts.
From my experience, Amazon's quality of execution and resulting customer experience is just so much better than that of (most of) their competitors. Most people therefore tend to gravitate towards them over time as they have negative experiences with other companies. Personally I don't like the fact that Amazon is evading taxes here in Germany so I often try to order things (personally and for my business) on other websites, but honestly there are very few suppliers that can match the price and speed of Amazon. From my personal estimate, about 50 % of the orders I placed with other suppliers didn't arrive on time / as promised due to various reasons: Sometimes people would put the wrong address on the package, sometimes they would just forget to ship the item on time, sometimes their inventory management system would mark an item as available when it was already sold out, sometimes the payment wasn't correctly processed.
After wasting several hours of my time dealing with the (often unresponsive) customer support of these suppliers I tend to order most things on Amazon even if the price is slightly higher, as I know that the delivery speed and customer support will be outstanding.
I've been a customer since 1998, it was excellent for most of that period but has been slipping over the last couple of years. It's now become the last resort for me even if it means paying a bit more elsewhere.
I agree, reading the reviews on Amazon is like trying to divine tea leaves sometimes. I feel like they're going the way of eBay in terms of quality expectations.
The main point is that Amazon's advantage is exposing divisions to external competition. Without it "internal supplier gets complacent with a captive, internal customer."
However later paragraph says:
> The key advantage that Amazon has over any other enterprise service provider – from UPS and FedEx to Rackspace – is that they are forced to use their own services. UPS is a step removed from backlash due to lost/destroyed packages, shipping delays, terrible software, and poor holiday capacity planning. Angry customers blame the retailer, and the retailer screams at UPS in turn. When Amazon is the service provider, they’re permanently dogfooding. There is nowhere for poor performance to hide.
On one hand, as Amazon opens up the pieces that comprise its architecture, they begin to compete for external customers. On the other hand, Amazon itself keeps using its own solutions.
By the way, it’s not just that Amazon prevents its divisions from becoming ‘fat and inefficient’ by opening them up to external competition. Crucially, thanks to commoditising early and getting tons of companies to use its platform, Amazon can now see how others innovate on top of it (having low-level access to consumption information) and quickly follow on anything new, basically innovating but without risky R&D of their own[0].
What he's saying is that all services Amazon provides are going to have both internal and external customers. Both will drive the service to be better, and never get complacent.
External customers will signal that the product sucks by not being customers of it. Internal customer will force the product to be reliable because if it isn't your director will hear about the costs of it not being so.
Bias: 5 years at Amazon. May someday go back if the startup I joined falls.
The larger point is that companies that 'synergise' divisions see initial efficiencies. However, over time, without external forces, those efficiencies atrophy.
By having two customers for a service, at least one of those external to the organisation, competitiveness is kept in focus.
On a side note, a lot of local retail stores still don't take their online presence seriously. For example, displaying things on their webpage which are not in store. However, given how out of touch the retail industry is with the tech world, this is not surprising.
> It’s impossible to imagine a future 10 years from now where a customer comes up and says, ‘Jeff I love Amazon; I just wish the prices were a little higher,’ [or] ‘I love Amazon; I just wish you’d deliver a little more slowly.’
No matter when Mr. Bezos said this, there's slowly growing awareness of the mistreatment of workers, engendered by shockingly low prices, with Walmart the posterchild for businesses being horrible within the confines of the law. Things like scheduling workers for 39 hour work weeks to not qualify them for health-care, or driving suppliers out of business because they can, all in the name of "it's only business". On the other end is various ethical sourcing standards like Fair Trade, which originated long before Starbucks picked up on it.
And a surprising lack of awareness of poor conditions in Amazon warehouses, e.g. lack of air conditioning in hot climates, strict security checks that exceed 30-minute waits.
I appreciate the insight in this article, but I wish I could remove all of the predictions. The insight (to me) is that it may be a good idea to take tools your company uses and make them into products, for several reasons. That's interesting and valuable to me to consider.
But there are also predictions: "Amazon’s lead will only grow over the coming decade, and I don’t think there is much that any other retailer can do to stop it."
The author is tunneling on one thing Amazon does. He will escape accountability for his boldness because nobody will remember this article at the end of "the coming decade." If he's right, he can drag it back out and say he called it. Otherwise, no harm.
Amazon has focused on being an online retailer, be it weird art stuff or movies or storage. They divested what they focused on - which again, is pretty common. Look at P&G, for example. Or Nestle.
Businesses expand, but not in the way the article describes. Most businesses pick segments to expand into, whereas Amazon expands into everything that they touch.
I think one underappreciated advantage that amazon has, and that is probably less savory:
Because so many competitors and potential competitors use AWS, they have many opportunities to undercut their own customers and introduce competing products with lower costs, because they're using their own services. They can simply look at their fastest growing customers scope out their system architecture and duplicate it.
Not going to their physical stores can be rational. The one nearest us is sadness made manifest. All the workers and shoppers seem like they hate life. Plus, no-one who shops there knows how to exist in a space with other people without constantly being in the way. The place can be 1/2 as busy as Target, and feel twice as busy because no-one there knows how to walk properly, nor do they seem aware there are other people in their world at all. Perhaps this relates to the intense sadness they all project. They seem lost in a fog, emphasis on lost.
The checkout lines are also usually 2-3x as long as Target, no matter how busy or not-busy it is (they more aggressively cut employee hours to the bare minimum required to function, I'd guess).
Interestingly, in my small midwestern US college town, I have the opposite experience. The college-associated people who consider themselves educated/intellectual/cultured gravitate toward grocery shopping at Kroger, while the "townies" and not-particularly-academically-serious undergrads go to Walmart. I choose Walmart because Kroger "feels" much more crowded and the members of the crowd seem to exhibit much less situational awareness.
This sounds like Bloomington, IN. Except that town's Wal Mart crowd is mostly dictated by location. Kroger locations are walking distance and short bus ride, Wal Mart is predtically out of town.
Walmart has a solution for the WalMart atmosphere/class issues - offline-pickup. Order online, don't leave your car, and someone will place the order in the trunk.
(which I understand means they aren't offering high enough pay and so on, but the staffing levels they maintain are an interaction of multiple factors, customer traffic, pricing expectations, etc., not just arbitrary cutting of hours)
Agreed, but is Amazon really any better? Seems like they're (Amazon) the final nail in the coffin for many local businesses, after Walmart already put them there.
Speaking for Costco -- No, because they treat their employees well, provide good benefits and pay, and don't view their employees as just another cost to slash in order to increase shareholder value and corporate bonuses. Basically they treat their people as a priority.
Speaking for Lowes and Home Depot -- Yes, because they view the human element of their labor as inputs in a function to get as much labor as humanly cheap as possible, circumventing as many laws as possible, to increase shareholder value and corporate bonuses. Basically they treat their people as a liability. (If I have one anecdote that basically sums up Lowe's C-levels: They treat technology and people as a cost. When we asked 49,000 dollars to upgrade a server room that was practically a fire hazard, we had to pull teeth. When it came time to spend 21 million dollars to upgrade their private jetliner so that it could make it to China in one trip, instead of having to stop and refuel, they approved the cost unanimously, almost without thought. Money that amounts to basically a drop in the bucket to make your job, a core function of our daily operations, much better? Nah. 21 million so we can fly to China faster every time the need arises to find more workers to exploit for cheap labor and then resell here in America for 90% markup? Heck yes.)
Finally, I can't speak for Target because I have no idea about them.
The common element here: People, and how you treat them.
Agreed. Walmart retail, both physical and online, does not exude class, quality, or customer support.
As the article stated, Amazon has become well known as being customer-centric almost to a fault. I am confident when ordering anything from Amazon because I know that returns are quick and painless.
Prime example: I ordered an expensive Toto toilet for my master bath remodel, and it arrived next-day for free. Even if the shipping cost was rolled into the price, I still paid $500 less than local suppliers. The contractor got the toilet fully installed the day of delivery and, during leak testing, we discovered a hairline crack in the one-piece ceramic tank. I contacted Amazon immediately and, the very next day, had a replacement Toto toilet on my doorstep and a UPS driver hauling the cracked toilet to his truck.
I can't see Walmart ever providing this type of customer support.
> As the article stated, Amazon has become well known as being customer-centric almost to a fault. I am confident when ordering anything from Amazon because I know that returns are quick and painless.
i'm the opposite at this point. the surge in counterfeit, or low quality chinese shit comingled with previously good listings on amazon, has pushed me to let my prime lapse after six years, and i simply don't trust amazon for things other than books at this point. maybe that's just me and the things i shop for (mostly <$50 purchases), but returning things through the mail is a fucking pain and a huge friction.
I don't think I've ever seen a counterfeit on Amazon. If you find them easily can you show me an example listing? I don't know if I'm gullible, or I don't browse the kind of products where they're found, or what.
There's a big problem with it. Even Apple "has found nearly 90 percent of [their chargers and cables] to be counterfeit" on Amazon.[1]
You could also read the reviews on listing for products such as the popular Yeti cooler mugs, and you'll find many people complaining about getting fakes (wrong color lid, etc.)
Those are reports of the problem - I get that it's true - but do any of those links actually point to product listings which are clearly fake? I don't think I've ever been sent a fake product, or seen any suspect listings. Maybe I'm gullible and have been buying fake all this time?
I don't buy anything on Amazon that has less than 4 stars and hundreds of reviews. Even 4 stars is a bit low for me.
I don't think I've ever bought a counterfeit product on Amazon.
I looked through all your links, and most of the counterfeit items had less than 100 reviews and almost all couldn't even get a 3 star rating. It's pretty easy to tell that those items are counterfeit actually.
> returning things through the mail is a fucking pain and a huge friction.
If your stuff is relatively small item things, you can use their locker system to return items. It's somewhat better than going thru the postal system or UPS or such, but you'd still have to physically go to one.
Have you tried to return something at a Walmart? It's actually one of the easiest thing I've done in a store. No questions asked. Show your receipt and you got a refund. They'll coupon and price match too without batting an eye.
The rational idea is not going to the store because you don't like the people or the climate there. The slightly less rational idea is that you won't shop at their online store because of the name association. You're not interacting with their customers or staff, but when you see the name you still feel the association with their customers and staff.
Just because you can quantify why you feel that way doesn't make it rational. I don't like spiders because they look scary. I've never been bitten by one or even threatened by one, but I still don't like them. That's an irrational fear, even though I can tell you exactly why I don't like them. If you don't like Walmart because of its customers or staff, refusing to shop online with them is irrational.
> The slightly less rational idea is that you won't shop at their online store because of the name association.
Yes, but why is the name association producing an aversion in this case?
If it's simply a matter of not wanting to support a company you find ethically dubious for example (which would perfectly describe Walmart), then it would be perfectly rational to want to avoid it and all its associated ventures.
Yeah it's not clear if the aversion is due to their corporate citizenship or the reality of the inside of their stores. One is rational, the other is not.
Well, if you are going to force me to actually think about it rather than just fire off one liner advice on the internet to one of the most successful companies in the history of the world like I actually have any idea what I'm talking about:
I would try it with some higher-end stuff first, relying on the same distribution system and then slowly moving the most popular online purchases over to it to ensure that the "walmart" feel is eliminated. I'd focus on a high end "organic produce" feel to the website.
Target did something similar with it's "Up&Up" store brand stuff, and they have done it with clothing lines as well.
The hard part is Walmart admitting to itself that it's image, particularly on the wealthy, online-shopping coasts, is not universally good, and slapping a wally-world star on things is going to drive a lot of good customers away.
About the time Target began its long decline, James Lileks wrote about how he'd welcome a Target-alternative with short lines and clean, well-stocked stores ... IIRC, he suggested it could be called Samuels.
To be fair, the walmart website is barely responsive, has very little filtering/differentiation features and has a search that works every alternating thursday.
What I'd like to know is how Bezos convinced investors & shareholders to accept those razor thin margins and profits for all those years. I get the growth argument, but we're into 20 years since its IPO and it's only lately that we're seeing profits.
Formally declaring a profit just results in a higher tax bill. Better to reinvest in R&D if you can keep the growth rate up. AMZN was < $40 in 2008, now it is pushing $1000. That's why shareholders are happy to let Bezos keep reinvesting.
How to solve the suckiness of Amazon Canada? Catch-all searches, missing features and benefits, terrible inventory, high prices, exaggerated/fake prices, etc...
Outside of AWS, you're looking at inflated prices, sometimes 5-10x for normal products, about half the inventory (if not more) filled with fake, low quality garbage from China, Prime 2 day deliveries that often take much longer and sometimes never arrive, and some of the worst (but also best, it's hit or miss) customer service I've ever seen. Fulfilled by Amazon doesn't do shit to address any of these problems. In fact, Amazon doesn't do shit to address any of these problems. You'd think it'd at least address the fake/crap goods problem. Nope. AWS itself seems to me to simply be an unfinished service that people are willing to pay vast amount of sums for the privilege of complaining about their AWS bill. Hell, it's so common, it's now happened twice in the show Silicon Valley (same AWS joke, two times) and too many times to count at every job I've ever been at that considered AWS. Outside of AWS, Amazon is not only catchable, for most products, there are already better alternatives.
Quality. I might be out of touch, but I think a coming consumer focus on quality will change retail and manufacturing.
> because you can build a business strategy around the things that are stable in time. … [I]n our retail business, we know that customers want low prices, and I know that’s going to be true 10 years from now. They want fast delivery; they want vast selection. [-Bezos]
Quality is more important than price, delivery and selection for a large, and increasing, number of goods. If you buy an air-conditioner or t-shirts you want good quality, but only need reasonable price, delivery and selection.
> Amazon will only be brought down by ... a paradigm shift in how we consume physical products
Buying clubs that focus on Quality are the future. Consumers will be freed of toothpaste brands and marketing, and instead get a cheap, effective, quality toothpaste selected by their buying club. And the club will focus on protecting the customer and auditing the manufacturer, rather than enabling marketing and an irrational focus on price.
Amazon won't be able to compete because it works against every system they've built. Instead of a variety of manufacturers, brands and sellers, buying groups will go down the path of vertical integration: work closer with manufacturers ignoring brands and marketing, buying manufacturers to reduce costs, internalizing fulfillment, etc...
If the buying clubs are merely brand selectors, or discount clubs, or product reviewers, they can be easily integrated into Amazon systems. But if buying clubs are focused on the best product for their members, Amazon and Wall-mart (and everyone else) will have to change their business.
Wall-mart optimized for price, Amazon optimized for price, delivery and selection, but optimizing for quality is the future. (Or I'm out of touch :)
"Buying clubs that focus on Quality are the future"
To a degree I agree with you, but buying clubs are not great either. For instance I tried out "Harrys Razors", but I only shave once a week. A blade lasts a while for me. So even with the "lowest frequency" option, I ended up drowning in razor blades.
I also tried one of the clothing clubs, because I hate cloth shopping. I ended up getting a lot of stuff I Hated.
I like the idea, but there's something to be said for "buying what you need when you need it".
Harry's likes to try to upsell you on new products, but due to their niche it isn't actually possible to create new products. So they've ceaselessly sent me newsletters for years with nothing but new colors of the same handle.
Half of my Amazon packages are now delivered by an Amazon van or by some guy's personal vehicle with an Amazon magnet on it. I believe they're a mix of the Flex[1] program the author referred to and private companies Amazon is contracting[2]. Not a stretch to see them adding pickup as a service and competing directly with USPS, UPS, FedEx etc. See also the companies they're acquiring in this area[3].
I for a time worked for the USPS- what lots of people don't seem to realize is that pickups and last mile deliveries are precisely the businesses that UPS and FedEx want no part of. They are extraordinarily complex in most areas and very expensive. The money is in flying and trucking the packages across the country. They actually pay USPS to do it for them in a lot of places because it's cheaper than doing it themselves.
After all the USPS has been in that business for 200 years and not too many people are bullish on them. Why would Amazon getting into that business be good for them?
Eo meaning executive order. I dont think a president has cared to try an eo for the usps, but anything is possible with him.
He could possibly eliminate the monopoly the usps has on the mailbox and the monopoly on first class mail.
In reality nobody (the majority) don't need mail 6 out of 7 days. Not even 5... Or 4.. Informed delivery is telling people "i dont need to go to the mailbox today." so delivery frequency may be looked at again.
Maybe it's because of "the free market improves everything" that Amazon started offering their own fake review service, fake branded products and cheap knockoffs. After all, fraudulent marketing is indeed one of the services provided by the infallible free market.
Not sure why you're taking digs at the free market since let's face it, Communism couldn't even reliably feed people or produce one right shoe and one left shoe on any regular basis.
The interesting thing about Amazon's horizontal service architecture is that it should be easy to break up if it starts using its monopoly power to charge rents. Given that its market cap seems predicated on future rents, there may be a reckoning.
The article claims that the base of Amazons success is their approach to make internal services compete externally. I think this is just an implementation detail.
The broader concept is their willingness and ability to keep improving the user experience. And that is something they have in common with many market leaders.
You could as well look at Google, Booking.com or Facebook. They did not win by inventing their niche. They won by creating a better user experience. Compared to them, their competitors user experience was and is atrocious. They built a company culture of high standards and putting the user first early on. And since it worked, they kept it that way.
I gave up on Amazon the other day. What did it? The "accidental" signup for Prime. They have a multi-year track record of doing this to people, some of whom can't afford it. I rarely need to get anything from them. So I cancelled both Prime and my account. They are clearly uninterested in keeping up service quality these days.
I've come across Amazon doing surge pricing before.
A pair of earbud headphones came up in an article praising them at their price point, so myself and a bunch of other people decided to buy them. They were $35. Amazon had it for sale through a bunch of resellers, and themselves for that price.
You couldn't order any of it though, it would error out and say it wasn't available right now.
I tried ebay, and got almost the exact same message from ebay on everyone selling those earbuds.
I ended up ordering it off of a 3rd site, which was already sold out, but honored the price.
In a few days, Amazon let it's sellers sell the item again, but around 2-3 times the original price.
It's interesting how they and Ebay blocked the sale of a suddenly 'hot' item like that, to price gouge everyone who had decided to purchase them.
Amazon is taking over the world either by AWS or by their stock investors.
In my intimate circle, nobody talks about Amazon and more about a local competitor. I'm not sure if it can be generalised ( Belgium). It could be that we just aren't interesting for Amazon ofc
> I do think Amazon’s culture is incredible and Bezos is the most impressive CEO out there
chuckle Very very few people who work at (or have worked at Amazon) think this. Having worked with Amazon since 1999, I have never been impressed by their technology or leadership. They have been very lucky and had to pivot. AWS allowed them to build their online marketshare, not some CEO direction.
i.e. [take chances in entering new markets, fail a lot] is not a particularly insightful strategy. Many companies do it when they have the capital.
Is there scope for a more open distributed app or service(which wont make much money for itself, but more broadly available like craigslist) to coordinate local sellers, rating services, insurance, delivery companies which any one can opt into? Customers see all available local options for products and sellers. A seller doesnt just have rating but can also optionally be backed up by another company who ensures against product failure.
Amazon, for business reasons, wont commoditize some core functions, which the above website can.
Analogy would be to locked in social network vs email as an open protocol.
I don't see the US Govt. doing much trust busting or paving the way for competition at all. Just look at the sad state of US braodband--established companies have lobbied for deals that keep competition in check, the bar for entry high, and favorable taxes for all but the middle class.
I'm from India, and amazon is more relevant now than any other time here. The market leader in India is flipkart, Amazon a close second and a company called snapdeal a distant third.
Interestingly, in next few months if not days, there is going be a big consolidation (merger of flipkart and snapdeal, that is first and third) which is aggressively pushed by Softbank (investor in snapdeal).
As an aside, for a long time, local entities are asking for concessions against global players like Amazon and uber, but so far it has not gone anywhere. One of the reasons against this is most of the investor money in local entities is from abroad. Though it is true, flipkart truly pioneered online market (in India) and when it tasted success, amazon simply jumped in with its huge cash war chest. It will be interesting how Indian market will play out with respect to Amazon.
Yes, agree. in the article world = US. Its pure ignorance I have seen with people from US. They dont seem to know that other "worlds" exists outside the north american continent.
europe, i buy nothing from amazon, everything I checked there cost there more than in local chains/supermarkets/eshops, so I don't really understand hype about it, same goes for illegal uber drivers which cost more than licensed taxi ordered through taxi aggregator app
same goes for china where pretty much nobody use amazon with their 90s website design
Seconding this. I have never bought anything from Amazon. People here don't even consider it when making a choice. They just buy from allegro (our local eBay) and from thousands of on-line stores.
I don't know if Amazon has some cheap delivery here in Poland or do they ship everything from abroad.
BTW would you mind telling me some recent purchases and their prices so i can compare it and let you know
because when i checked tablets, mobiles and pretty much anything, everything was more expensive than in local eshops, if it's Chinese phone or some noname stuff then AliExpress is the king
What if Walmart offered same-day-delivery using their existing physical shops as logistics centers? Actually, the fact that Walmart do NOT sell third-party items in their website can make they service better (less crowded, more focused, more quality).
OT: why Walmart don't expand to Europe and other regions?
what could they offer in Europe compared to Lidl or Tesco? heck I've been there few times in China and it was maybe the worst chain i experienced, even almost any Chinese chain had better variety of products and better prices, even Carrefour was one level higher
I see in a lot of threads that people talk about "many companies that do third-party fulfillment". As someone actively in the market for such services, can anyone provide some links to a few services please.
"By carving out an operational piece of the company as a platform, they could future-proof the company against inefficiency and technological stagnation."
This sums it up for me. The computing platform is the foundation of Amazon's survival. Get that right and then make it unassailable, and world domination is inevitable. In some ways, Microsoft used the same approach by separating the operating system from applications and letting each application compete on it's own. They quickly found ways to team those applications for advantage.
Amazon has the computing platform dominance, the consumer behavior data at massive scale, the delivery platform (they're buying ships?), ... they're not just after Retail, but anything that touches customer experience. FedEx is in the cross-hairs...
What concerns me regarding Amazon becoming a retail monopoly is what happens when Amazon can't sustain itself with respect to persistent economic downturns? Like just one bad year I suspect could wipe them out if they're not careful. So putting all our eggs in one basket isn't good in my opinion. I'd rather have a dozen smaller retailers which half could go down in flames than one huge one which causes a long term disruption if it files for bankruptcy.
Amazon is eating the world because I'am 2m tall with 48 size feet(eu, 13 us) and I didn't (couldn't) buy a single pair of shoes in a physical shop for 10 years now. Let the world burn and amazon eat it when it's medium rare.
This is incredible. Walmart has free two-day shipping on orders over $35 right now, with no membership required, and yet people are still writing articles like this asking, "will it be possible for Walmart to get 2 day shipping within the next couple years?"
Because of the problems with third party sellers (combining different sellers into the same product page, comingling, fake reviews, etc.) it's getting harder and harder to buy stuff on Amazon, plus you need a prime membership to get fast free shipping. I've also had tons of problems with Amazon deliveries since they switched to their own logistics company. In comparison, Walmart is looking better and better by the day.
This isn't some day in the future, it's now. I'm seriously considering cancelling prime and just using walmart when I need 2 day delivery.