Amazon, the world’s largest online retailer, is testing unmanned drones to deliver goods to customers, according to Chief Executive Jeff Bezos.
The drones, called Octocopters, could deliver packages weighing up to 2.3kg to customers within 30 minutes of them placing the order, he said.
However, he added that it could take up to five years for the service to start.
The US Federal Aviation Administration is yet to approve the use of unmanned drones for civilian purposes.
The advantages to the store-as-fulfillment center plan are that Best Buy can deliver products faster and cheaply. The downside to that strategy is that Best Buy’s in-store inventory visibility isn’t good and the staff may not be as efficient as people in a distribution center.
The conventional wisdom would say that Best Buy’s stores are an albatross around their neck — much like they were for Blockbuster. But what if they can shift them into being more along the lines of warehouses — much like the ones Amazon is trying to build as quickly as possible — for fast local delivery? And what if only a small area of those warehouses were actually a storefront to show off their goods?
This would all take a lot of logistics (and possibly some re-zoning?) but it doesn’t sound like the craziest idea in the world. Again, what if your weakness is actually your strength?
Sounds like Joly might be onto something. But he can forget the ‘Microsoft Experience Stores’.
"The amount of training required by new employees is also remarkably lower when using chaotic storage. It is not necessary for them to memorise the entire warehouse layout or even single storage locations. This will allow you to replace staff more easily or hire seasonal workers during peak times."
Or to put it another way - Amazon’s warehousing system actively prevents workers becoming experts or skilled even on the entirely enfeebled terms warehouse work might allow - they are parts of the computer process, albeit parts with legs.
Amazon has a lot to answer for in terms of contracts, conditions, pay etc - but also it seems to me that even conservative commentators on work would agree that part of the virtue of work is the opportunity to become better at a job, and learn while you’re doing it.
Another point of view is that Amazon is designing for robots, but the robots aren’t quite smart enough yet: they are deskilling down to the point closest to their robotic ideal.
Major U.S. retailers are experimenting with new e-commerce strategies that could dent demand for package delivery services, particularly demand for shipments over long distances, according to analysts and industry executives.
Amazon.com Incis building its distribution warehouses closer to customers to save millions of dollars in shipping costs. The world’s largest online retailer is also increasingly using its own delivery trucks, cutting UPS andFedExout of some parts of its fulfillment network.
Meanwhile, major brick-and-mortar retailers such as Wal-Mart Stores Inc, Best Buy Co Inc and Gap Inc are shipping more online orders from stores close to shoppers, rather than from warehouses hundreds of miles away.
So, Amazon builds more distribution centers near urban areas, and Walmart ships from more stores, and UPS and FEDex lose a bundle. And Amazon is building its own delivery fleet, too (when will they start flying their own planes?).
Barnes & Noble has risked a lot on Nook, and it’s not panning out. In fact, it’s hard to see how they can stem the fall of the retail giant.
Barnes & Noble Faces Steep Challenge as Holiday Nook Sales Decline - Leslie Kaufman
The results, covering a period that ended Dec. 29, are a sobering development for the nation’s largest bookstore chain. The declines occurred during what is supposed to be peak buying season. And the Nook unit’s sagging fortunes came despite a 13 percent increase in sales of digital content, suggesting that it is the tepid demand for Nook devices that is dragging down the unit’s performance.
Barnes & Noble has invested heavily in developing a tablet that can compete with offerings from media giants like Google, Apple and Amazon.com. Last April, in announcing a $300 million investment in Nook by Microsoft, the chief executive of Barnes & Noble’s chief executive, William J. Lynch, said the company wanted “to solidify our position as a leader in the exploding market for digital content in the consumer and education segments.”
A few months after that, the bookseller began breaking out the financial results of the Nook division, In October it completed its strategic partnership with Microsoft by creating Nook Media, a subsidiary and a signal that it was ready to ride its digital business into the future.
But while Barnes & Noble’s most recent Nooks have won critical praise, they have failed to gain significant traction with consumers.
Other companies do not break out sales of their digital tablets, but Amazonhas been saying sales of its Kindle Fire were strong. Analysts say Apple’s iPads also appear to be doing well.
“The problem is not whether or not the Nook is good,” said James L. McQuivey, a media analyst for Forrester Research. “What matters is whether you are locked into a Kindle library or an iTunes library or a Nook library. In the end, who holds the content that you value?”
For an increasing number of consumers, he said, the answer is not Barnes & Noble.
Though the company’s stock was down only slightly — falling 2 percent to $14.22 — the reaction in the financial world was unsparing. Analysts stopped short of saying that this was a do-or-die moment for the Nook Media division, but they acknowledged that options for a strong digital future were narrowing.
In a note to clients, S&P Capital IQ said, “We think this portends greater market share losses for the Nook over the medium term” and downgraded its recommendation on Barnes & Noble stock from hold to sell. Barclays said in a note that the Nook’s precipitous decline was “quite concerning” and “below even our modest expectations.”
Last month, Barnes & Noble announced that Pearson, the British education and publishing conglomerate, was taking a 5 percent stake in Nook for $89.5 million. Analysts said that cash investment was welcome and the partnership with Pearson, a major publisher of educational textbooks, might herald a strategy to move toward dominating an education niche market. Still, that would be a significantly smaller business.
My bet: Barnes & Noble will have to bail, even if Microsoft decides to increase its investment in the technology. (I doubt that Microsoft is ready to invest more heavily in a company building on Android technology, at least not until Ballmer leaves, and they bring in a new CEO who gives up on Windows.)
The Nook HD is based on the Android Ice Cream Sandwich platform and has a roughly equivalent hardware and software platform as the Kindle Fire HD. It’s slightly cheaper — like $30 — but Kindle has first mover advantage and huge capital resources. And any comparison to an iPad makes Nook look like something from a few years ago.
Maybe Texas Instruments — who make the chipset in Nooks — wants to get back into retail products? Not likely. However, Intel has been making motions to shake up their business model with the collapse of the netbook market, and the decline of PC/Windows sales, and with a market cap of over $100B they might have the money to take a run. But would they have to buy Barnes & Noble to do so? I wouldn’t buy that side of things.
Google’s another player who might want to play with Nook, but not Barnes & Noble, per se. But it would be interesting if Google decided to go retail with their own gear, as well as do something different in bookstore retail. Imagine, for example, if bookstores were reconfigured to be like gigantic Redbox machines, where you could type in any of millions of books, ten thousand of which are actually in the machine, and are delivered on the spot into your hands. All others delivered next day to your home. One percent of the staff costs. But I have no reason to believe Google is tending in this direction.
A 2013 prediction: Barnes & Noble with sell, spin out or shut down the Nook business. Pearson might be a fallback, with Nook becoming a niche educational tool.
An interesting rumor making the rounds, that Google is discussing building out a wireless netwrok in partnership with Dish:
According to “people familiar with the discussions,” Google has talked with Dish Network about the possibility of creating a new wireless service. Although Dish is known mainly for its satellite TV offerings, the company is sitting on some unused wireless spectrum and has openly talked about building a new network with a partner. Google is one of the companies who has showed interest.
The negotiations weren’t in advanced stages, the Journal reports, so this could turn out to be nothing. Still, the idea of a wireless service from Google is interesting to think about, and it would make sense both to the company and to users.
Wireless carriers need disruption. They slather their phones–particularly Android devices–in bloatware that you can’t remove. They invent new fees without good reason. They find ways to charge you extra to use the data you already pay for. They stick their logos in unsightly places presumably just to remind you who’s boss.
There’s no guarantee a Google wireless service would provide the opposite experience, but at least Google has different motivations. Instead of simply trying to juice average revenue per user, Google’s priority is to get people hooked on Android so that they’re always buying apps and media and relying heavily on Google search.
A more general and more persuasive argument could be the benefits of better user experience in integrated solutions. For example, Amazon’s provisioning of WhisperNet for its Kindle devices — provided free, by the way — is a great example. A user simply buys a device and a minute later is downloading their first book, and reading it a minute after that.
Leaving aside the basic argument of Whispernet immediacy, consider other capabilities. Imagine if Apple was running the network I am using at this moment, tethered through my iPhone (on a train headed to NYC) instead of AT&T. I bet Apple, Amazon, or Google could figure out how to give me more bandwidth, so that I could really watch streaming video, wherever I go.
If the mobile device becomes as fast as it needs to to support full video, why would we need cable in our homes and offices? We wouldn’t. Everyone would have their internet access with them everywhere, all the time.
And if the mobile device becomes the primary connect to the internet, then Apple, Google, and Amazon could pull a complete end run on the wireless companies and the cable companies. They could go directly to the TV networks and the sports cartels (NBA, NFL, Premier League), and pipe them through this new distribution system.
Get ready for a huge shift.
Microsoft is gambling a lot for a chance to fight with Apple, Amazon, and Google for the proximal (‘mobile’) device market. They are pissing off their historic partners, like Dell and HP, by making their first computers ever. The alternative might be to simply become an enterprise software company, milking Office, Sharepoint, and Yammer for the next decade.
I admit I like the keyboard cover idea, but I expect Apple will respond to that quickly.
But it may be too late, since the clients they want to attract with Surface and later products have already moved ahead with deployments of Apple and Android tablets:
With New Tablet, Microsoft Faces a Balancing Act - Nick Wingfield via NYTimes.com
Rich Adduci, chief information officer of Boston Scientific, a medical device company, has more than 20,000 PCs at his company using older Windows. But he has also deployed more than 5,500 iPads to sales representatives and other employees.
A day late and a dollar short?
I am constantly baffled by the microeconomic, inward-focused analysis of what should be viewed as large-scale technoeconomic trends. It’s so off that — from my view point — these authors completely miss what’s going on. The narrative can be so far from touching the causative that a reader of my blog might wonder if we are looking at the same world.
Here’s a fisked example:
In Mobile World, Tech Giants Scramble to Get Up to Speed - Claire Cain Miller and Somini Sengupta via NYTimes.com
The industry giants remain highly profitable drivers of the economy. Yet the world’s shift to computing on mobile devices is taking a toll, including disappointing earnings reports last week from Google, Microsoft and Intel, in large measure related to revenue from mobile devices.
[It was recently shown that as much as 70% of the use of ‘mobiles’ is in the home. So they aren’t ‘mobiles’, per se: they are proximal devices: the com(munication)/com(puting) device always with us. Therefore, much of the narrative about mobile comcom is wrong.]
Investors are in suspense over Facebook’s earnings to be disclosed Tuesday, for much the same reason. Yahoo’s new chief, Marissa Mayer, said on Monday that Yahoo had failed to capitalize on mobile and must become a predominantly mobile company.
[It may seem natural to watch the so-called giants struggle with proximal, but much more of our attention should be directed to what people are actually doing with proximal devices. For example, checking prices online while shopping in brick-and-mortar stores — ‘showrooming’ — is now commonplace. A recent survey showed that 97% of showroomers bought the product searched for online later for less. This is forcing brick-and-mortar to match Internet prices, or die. But by matching low-overhead outfits like Amazon, they will go out of business, just a little bit slower. Google could optimize for that experience, but people are more likely to jump to Amazon. Facebook may be the scene where people chat about products while in the store, but they jump to Amazon to price check.]
Demand for Intel chips inside computers — which are much more profitable than those inside smartphones — is plummeting. At Microsoft, sales of software for PCs are sharply declining. At Google, the price that advertisers pay when people click on ads has fallen for a year. This is partly because, while mobile ads are exploding, they cost less than Internet ads; advertisers are still figuring out how to make them most effective.
[I don’t think this a paragraph: the first half is about declining chip sales because of the rapid shift into a new era of computing, the post desktop era. Interesting, but not as compelling as the economic transition into the postnormal, which is what we are seeing in the drop in advertising revenue on increasingly social proximal devices. I think this is a permanent decrease in value, not a temporary one, not ‘just until things work themselves out’. Where people have better access to more information to inform judgments literally in their hands, the propaganda machinery will simply work less well. Despite the socialwashing going on in business, ads just will never work as well as they once did. Welcome to the postnormal.]
Since its initial public offering, Facebook has lost half its value on Wall Street under pressure to make more money from mobile devices, now that six of 10 Facebook users log in on their phones.
[Betting on a postmodern concept of social networking after we have skittered into the postnormal is not a good bet. Which some of us predicted.]
Making money will now depend on how deftly tech companies can track their users from their desktop computers to the phones in their palms and ultimately to the stores, cinemas and pizzerias where they spend their money. It will also depend on how consumers — and government regulators — will react to having every move monitored.
In addition, Nielsen found that only one in five smartphone users described ads on phones as “acceptable.”
Today almost half of Americans own a smartphone, according to comScore — an astoundingly fast adoption since Apple introduced the iPhone just five years ago. The amount of time people spend on their phones surfing the Web, using apps, playing games and listening to music has more than doubled in the last two years, to 82 minutes a day, according to eMarketer; the time spent online on computers will grow just 3.6 percent this year.
[The shifting grounds of privacy and publicy are still largely not well-understood. At the bottom is a change in identity, which technojournalists don’t want to dig into, except in Sunday supplement pieces advocating spending more time offline and the dangers of ersatz online relationships. However, at core, people’s perceptions of how and to what they are connected are primarily coloring our sense of self and well being: in general, we don’t view it as a privacy/publicy battleground. Facebook and other bad actors think of our interactions and movements as a resource to be stripmined for monetary gain, but the postnormal generation of social startups will more likely find a way to support us in our search for meaning and fulfillment, even if those companies make less money than Facebook would like to. And that search is more likely to play out for most on a proximal device, not the company’s 7lb laptop.]
“What has caught people off guard has been acceleration of the multitude of things that you can do with a smartphone,” said David B. Yoffie, a Harvard Business School professor who studies the technology sector.
“The Web started in 1993, ’94,” he added. “It didn’t disrupt everything for a decade and a half. The smartphone revolution started a half decade ago. Because of the existence of the Web, it allowed the phone to have a disruptive impact in a shorter time frame.”
[Yoffie suffers from thinking about time as a steady state phenomenon. But this is the postmodern, and time is going much faster than it was in the ’90s. The rate of change and innovation (and, negatively, destruction of the old Earth) is happening at a much faster rate. I think this is related to the urban density coefficient that West and Bettencourt discovered: where cities’ productivity is superlinear, growing faster than the doubling rate of population. I think our perception of the passage of time is increasing superlinearly, as a function of the combined social density online and IRL.]
Just another piece about the disruptive impact of mobile devices, and unless you untie the narrative and recast using postnormal eyes, you might think we were still living in 2004, waiting for the social web to happen.
Marshal McLuhan wrote in 1969:
Because of the invisibility of any environment during the period of its innovation, man is only consciously aware of the environment that has preceded it; in other words, an environment becomes fully visible only when it has been superseded by a new environment; thus we are always one step behind in our view of the world.
The present is always invisible because it’s environmental and saturates the whole field of attention so overwhelmingly; thus everyone is alive in an earlier day.