Cutting out the middle-man is likely to save money and give Amazon more flexibility over schedules and delivery options. However, this benefit will only accrue over time. As much as it makes sense to do this in urban areas, it is unlikely that Amazon will make a move on trying to service the American hinterland. Order densities and volumes, along with long travel times between deliveries, in many parts of the country do not justify such an investment. Amazon may find technical solutions to this – such as self-driving vehicles – but this remains some way off. The danger for the traditional delivery firms is twofold. Firstly, they are likely to lose business from Amazon; this will be slow at first but will accelerate as Amazon rolls out more of its own delivery services. Secondly, if Amazon starts offering delivery to businesses, it will likely do this at a reduced rate. This leaves delivery firms with the unattractive prospect of losing share in their most lucrative and profitable markets, while at the same time having… Read more »

I am not sure why there is a battle and why there has to be a winner, other than the consumer. Major carriers are in business to make sure that shippers can satisfy their customers (intended recipients). Amazon – I thought – is in business as a shipper. As such they will use commercially available carriers and may, through their vast R&D, come up with innovative methods of delivering. Some of these methods may be emulated by other shippers (Amazon’s true competitors) and other carriers. Did I miss a battle?

This is more than a cost-savings or profit enhancing strategy. This is to control the experience. In addition to the 20,000 vans that Amazon has ordered, they also have contracted for 50 cargo planes as they build out their hubs in three airports strategically located (near Fort Worth, Cincinnati and Chicago). Years ago Jeff Bezos said Amazon shouldn’t have customer service issues, but once the package left the warehouse, there was no control over the experience. The investment that Amazon is making in logistics, which includes planes, vans, drones, sidewalk robots and more is about keeping control of the experience they provide their customers as much, if not even more, than trying to find a less expensive solution.

The thing with Amazon is, they’re not afraid to throw a bunch of crazy ideas at the wall to see which ones might stick. When everyone else demands a 50-page business case and three-level deep ROI analysis, Amazon is busy trying all kinds of things, learning from those and iterating multiple times – before anyone else gets one new idea off the ground.

So when it comes down to it, I don’t think it matters what Amazon tries or which ideas succeed. I think the prototypes and tests that are rolling on the streets today will look nothing like the ultimate answers to last-mile fulfillment (I’m betting on Star Trek replicators myself!). But no one will get to that end result unless they take the first step, and Amazon and a few startups are really the only ones out there trying anything, and for that, they deserve the leg up they will undoubtedly get.

Simple. Amazon “buys” the USPS and then innovates mail delivery in an efficient way, acquiring the last-mile delivery capability for its packages as well of course.

As I have noted many times on RetailWire, Amazon’s mission is to satisfy consumer need/wants better than anyone else. That means Amazon has to do two things increasingly better than anyone else to continue to grow their share of spending: Amazon must be closest to the consumer at the moment an item is needed or wanted, sometimes even before the consumer is aware of the need (think of the evolution of the “1 click” to “subscribe and save” to “voice ordering”). Amazon must satisfy that consumer’s need faster than anyone else. This happens when the item is in the consumer’s hand and, in the case of many categories, assembled and usable (which is why Amazon is also contracting entrepreneurs for furniture and electronics installation and assembly, not just delivery). Reducing and removing friction in the demand satisfaction cycle is all Amazon cares about, it is the whole of their work — whether that friction is a minimum order size or item requirement, the order process itself (from “1-Click” to “Subscription”) or the limitations of their… Read more »

I don’t like the word “undercut.” “Undercut” implies cost and the delivery is all about cost. It is about efficiency throughout the supply chain. If you improve the last mile what are the possible improvements you can make prior? You may save money, yes. But you may also save time. You may also handle inventory more efficiently.

In the next several years, many alternatives will be tried and introduced. But the delivery needs are so varied that many will be adopted for specific geographic, population and customer needs.

I think the title says it all: multi-pronged approach. And that’s exactly the right approach to take from a retailer standpoint. There’s such a variety of terrain, product sizes and consumer preferences there’s undoubtedly going to be a number of successful autonomous delivery methods. Given the investment and interest in the space, the consumer is sure to be the winner in this game.

Amazon has not hidden its intention of vertically integrating into shipping services. The have already invested massively in delivery vehicles and airplanes, as Shep Hyken mentioned, and I wouldn’t be surprised if they acquire a large shipping company. Relying on a lot of third-party delivery services is risky, as Amazon loses control over the quality of services.

I wonder whether the “Amazon Scout” can solve the problem associated with people not being home. There is still an element of friction when a customer has to balance between when they are home and when the delivery will take place.