Jeff Bezos: Come fly with me

Ebay, Google and a host of startups have lately been looking to eat a bit of Amazon’s lunch by offering same-day delivery of orders placed online. But on 60 Minutes last night, Amazon CEO Jeff Bezos had a message for them: You’re doing it wrong.

As the world now knows, Amazon is toying around with self-guided, drone aircraft that it imagines could one day deliver small packages to customers by air in around 30 minutes — the FAA willing. It even produced a nifty little video showing an eight-rotor “octocopter” picking up and gently depositing a package on a customer’s front lawn, with nary a delivery man in site.

As many skeptics have pointed out, of course, and as Bezos to his credit acknowledged, you won’t be seeing Amazon Prime Air drones landing in your yard anytime soon. The earliest the FAA could publish regulations for the operation of commercial drones is 2015, but more than likely they will not be ready for several years after that. There are also myriad technical challenges that still need to be overcome, and questions of safety, reliability and security to be sorted out.

All of which has led to extensive speculation over why, then, Bezos chose to showcase his little hobby in his 60 Minutes interview. I think Om got it right on at least one point: Bezos was in part screwing with eBay, Google and other would-be competitors by dropping some serious gee-whiz on them from the air. But I think the main audience was Wall Street, and the message was quite specific.

Amazon is already the largest online retailer, but the next frontier in retailing is clearly the blending of e-commerce convenience with the instant-gratification of brick-and-mortar. Whether Amazon ever gets its fleet of delivery drones off the ground or not, Bezos’ message was that he is focused on building a scalable distribution and delivery platform for the future of e-commerce, not an updated Pony Express. Ebay and others may get some local traction with their same-day delivery service, but relying on a bunch of bicycle messengers and out-of-work actors to deliver your packages is not a business model that is going to scale very well, certainly not by the orders of magnitude Amazon would need to move the needle.

It’s the same message as was behind Amazon’s recent deal with the U.S. Postal Service to deliver packages on Sundays: We’re focused on optimizing delivery, and we’re thinking at scale. The Postal Service already operates at scale, and already has the infrastructure in place to manage reliable, in-person delivery.

 

 

 

 

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Paul Sweeting

Principal Concurrent Media Strategies

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