The article does not compare apples to apples unfortunately.
The author compares buying a shoe rack on Google Shopping Express to buying on Amazon. He is impressed that a plywood laminated shoe rack sourced by Target is only $12 while a bamboo shoe rack on Amazon is $20, and makes much of imagining, zomg-like, 50% savings on his Amazon purchases over the year.
If you look at the same Amazon search results page where the author finds the bamboo rack, there is a serviceable resin rack for $13 (the author is obviously not going high-end with his plywood one). Four results down from his bamboo rack is a natural wood rack for under $16.
The real gorilla horse in the room is that the author goes on to lament $5 shipping for Google, which swamps any savings he was getting by going with inferior product. "Now, Google has to make sure its free delivery thing becomes well adopted the way Amazon Prime was, because the $4.99 delivery was a non-starter for me, and ruined the economics."
Scroll down further. The author found the same laminated shoe rack on Amazon for $16.17, and notes that having a Shopping membership (equivalent to Amazon Prime membership) removes the shipping fee. That means that a price comparison of the same product was $16.17 vs $13.24.
Personally I think fretting over three dollars on a shoerack is a bit silly, since the shoes it's holding will each be at least an order of magnitude more expensive than the rack.
If I was Amazon I'd be more worried about self-driving cars.
Self-driving cars will make natural delivery vehicles. If Google partnered with local retailers to provide check-out via wallet and delivery via automated cars, it would disrupt more than just Amazon.
Google has all of the nascent building blocks in place: Google Wallet, Google Shopping Express, Google Shopping, Google Maps with StreetView for routing, automated vehicles, and, of course, eyeballs.
> Self-driving cars will make natural delivery vehicles.
Are you sure about that? Self-Driving cars are currently a very limited use case. They drive, but they haven't shown to be very adept at more anomalous behavior that humans can do, such as following detour signs, following traffic officer signaling at intersections, or finding parking spots in locations where they are unlikely to be towed.
Furthermore, when you want to actually deliver something, you have to do far more than a car is even capable of, such as unlocking doors (for apartment buildings with controlled access), opening the million different types of latches for front yard fence gates, obtaining legitimate signatures from humans, determining access requirements for new locations, finding and successfully navigating staircases, escalators, and elevators, and a dozens of other tasks that are years away and not prioritized in current research.
Your first paragraph is fairly easily solved with data. When self driving cars are common, there will no doubt be police databases with information about detours and parking etc. Given that, they will do a much better job than humans trying to find and read signs.
The other parts of delivery are more of a problem. But remember at one time we thought it was necessary to have humans pump gas, operate elevators, and dispense cash. Those tasks were only partially automated, but sufficiently enough that the rest of the job was dumped onto the customer.
You are limiting your thinking to one type of solution. You also forgot the one thing that will trump all this, the human mind. A criminal mind would easily be able to rip off all the goods in a situation with driver-less cars.
That is a movie-plot threat; you're being silly. Vehicles can stream audio and video and GPS tracking data to dispatchers who would know where and how the car got broken into and could dispatch security. The cars don't need windshields and can be hardened to making breaking in more difficult. With cameras and GPS tracking in all the other cars in the area, not to mention surveillance drones and police helicopters, getting away clean is likely to be tricky.
Actually, you are being silly. You have never been in "the hood" then where cops take forever to get there. Ever been to L.A., NYC, etc.? All that stuff cost extra money to equip a vehicle. Cameras can't do much with someone that has a bandana and shades on. You think the police will actually dispatch a helicopter for a driver-less vehicle? You sound like YOU have been watching too many movies. The cost to run drones in the air would end up being astronomical. I hope you are not being serious....
Self-driving cars could free up delivery drivers to do other things, such as sorting packages for the next drop-off location. I can't how many times I've seen a FedEx/UPS driver parked and trying to sort through boxes for a particular stop.
Very good observations. I wonder, though, if self-driving can work for moving items from a warehouse to "close enough" such that some smaller local service can carry it that last mile.
True, but given a choice between an amazing customer experience and saving money, most people choose the latter. See: ATM, phone tree, commercial air travel.
The delivery guy that does regular drops at our office does everything from crates of server parts to flatpack envelopes. I can't imagine any sort of separation that can account for the variety of deliveries that need to be made and be small enough to fit onto city side streets.
I envy the teenagers of the future. They are going to have such wonderful targets of vandalism and destruction. However, it will make sad when Google adds defense mechanisms to the robots and skynet goes live.
Yes and if it gets stumped it could alert a remote operator who could take over and figure out what to do. They don't have to handle every corner case if they have an escape hatch like that.
This will open up all types of theft. Camera on the robot? No problem, that mask and spray paint will clear that problem right up. Not to mention all the kids who will definitely be pushing this over for fun....
Same-day delivery is the next big battle in the eCommerce space, but the real challenge isn't on the delivery end. It's on the logistics and supply chain end. Amazon has been investing heavily in distribution centers, inventory management, and fulfillment. (And even Amazon has a largely expensive, small, and inefficient distribution network as compared to, say, Walmart's).
As seamless as the front-ends of eCommerce have become, it's easy to forget how much brute force is still required on the operations side of the business.
Automated cars can make deliveries pretty easily, but they can't move merchandise in quantity between locations. The latter is the bigger barrier to scaling the system.
Of course they can move merchandise in quantity between locations. Faster, safer and cheaper than anything that currently exists. That's the whole point.
But nonetheless, a major distribution network needs to be in place before this can happen.. If you only want same day deliveries, you could do with maybe 20 centres in the USA and automated delivery vehicles, if you want 1-2 hour deliveries you have to be much closer. And that's where the battle for omnipresence will be won.
To and from where, though? That's the issue. The issue isn't the delivery vehicles; it's the inventory management. For Google, the most likely way around this problem will be as a service provider / aggregator for existing shops (similar to Amazon's affiliate program).
Is it realistic that google will be the only self driving car company or even better by a large margin than others ? There are quite a few competitors today. And i think the u.s. government will highly oppose such situation, Since such situation is a clear and extreme concentration of power, seen from miles away.
If Google partnered with local retailers to provide check-out via wallet and delivery via automated cars, it would disrupt more than just Amazon.
That's still hugely inefficient, though. The optimal solution is what Amazon does for most things- a giant, central warehouse with stuff that you deliver.
I'm sorry but self-driving cars will not make any type of delivery. You obviously have not thought of even the simplest type of logistical delivery method. How would the package go from point A(the delivery vehicle), to point B(point of delivery). The simplest logistical standpoint of just getting out the vehicle and bringing the package to the residence is too advanced for any robot, anytime soon. A person can hop out, drop it off, and be on his/her way before a robot even gets to the curb. A self driving car with a person inside pretty much defeats the purpose of a self-driving vehicle.
Agreed. This was poorly written and he compared apples and oranges. The shoe rack with thinner cutout pieces should be expected to cost more than the blocky solid MDF shoe rack.
Internet shopping has a good historical analog. Mail order catalogs. It took a long time for things to settle down, but eventually everyone wound up with both mailorder and retail outlets.
Even the 800 pound gorilla of mailorder, Sears Roebuck, became a hybrid. It took decades before they opened their first store, but today it is mostly known as a chain of department stores.
I am sure that the same will eventually happen to Amazon. However not for a long time.
Mail order catalogs never offered the opportunity to transcend the experience at a store.
Digital experiences do theoretically offer that possibility. One example is using virtual augmented reality to see how that shoe rack will look in you're home, how does it combines with your wall and floor colors, etc.
And this "digital better than real" has already started todat. Some high quality furniture retailers or hotels(forgot which) ,use computer generated models for their catalogs, not carpentry and photography.
I agree that web sites do more than mail order did. And can do more in the future. But the fundamental similarity is there in the convenient to buy / don't get to physically interact / slow to arrive vs having to go to a specific place / get to physically interact / walk out with the item you want minutes later.
Also I remember my mother taking out a catalog, putting the picture of the thing she wanted in the place she wanted it, then standing back to better imagine how its colors would fit in. That is a valuable feature that you can't get in a store. (Things do look different in different lighting.)
1. convenient to buy - online will probably win , i think. From my personal perspective it's more convenient now for many products.
2. don't get to physically interact - most products don't need physical interaction , just visual one. And there's haptic feedback tech if needed.
3. slow to arrive - online is improving(1 day shipping, maybe better for a fee) and will be good enough for most cases.
And remember:store depend on volumes to pay the rent and keep the lights on. Once online takes enough market share from them, they'll might collapse under their own weight. Some even start to see this happening in financial statements of big retailers.
"Mail order catalogs never offered the opportunity to transcend the experience at a store."
Mail-order catalogs historically played a very important part in the life of rural Americans. You could even buy a house via mail order.
Even when it became possible to travel to a store easily, mail order catalogs still offered one thing that stores didn't: time.
You could spend hours, even days poring over your catalog, analyzing and obsessing. Every kid assembled his Christmas wish list from the Sears Christmas catalog, even urban kids.
Anytime an article claims company X is going to own ecommerce, you can almost stop reading right there.
Did you know Microsoft was going to own ecommerce too? Yep, throughout much of the early to late 1990s, it was a common statement. Magazines ran stupid cover stories proclaiming Microsoft would dominate ecommerce.
And a modern interface (re: Google)? What does that even mean. Like how Craiglist has suffered immensely because it doesn't have a supposed modern interface? It's a laughable statement. Just another indication the writer doesn't know what he's talking about. Consumers don't care about what some designer may think is a so-called modern interface. Consumers care about an interface being simple, fast loading, easy to use, etc. Amazon does a great job at that; they've compacted millions of products down to a single search bar and a drop down nav that is very easy to use.
The extrapolation the author makes about saving $2k to $5k per year is silly in nature. Complete nonsense. It ignores whether one product is superior to the other, such that one is more expensive / cheaper. It ignores consumer demand, dictating higher or lower prices. It ignores supply of the product influencing pricing. Personally I liked the bamboo shoe shelf and would rather pay $20 for it than $12 for the other one that I didn't like. The author didn't even bother to actually compare products. The caveat at the bottom nullifies the entire point of the post.
quote from the article:
"I’d pay 20-50% more for products just to avoid the inconvenience (and corresponding delay) in going to a physical store, like Target."
I do the opposite to the author; shopping online where I can not see and/or try the product because it is cheaper. Even the big supermarket like Wallmart, in the UK (ASDA, Tesco, Sainsbury and Co.) often fail short of having the best offers in-store.
This might be nice for one off orders of brand name items but it doesn't look to really challenge Amazon or any e-retailer that manages its own inventory. There are at least two main issues I see:
1) Selection - It’s easy to sell the popular stuff. It’s hard to sell the tail of demand. Aggregating together big box retailers can never compete on selection. People want to order things together, from the same place. Selection is crucial.
2) Supply Chain - It’s hard enough to have an effective supply chain when all the inventory is under your control. It will be nearly impossible to deal with N retailers supply chain systems - inventory availability, location, cross-company orders, etc and be efficient enough to make a buck.
Unless Google is willing to physically get in the game and manage some warehouses I don’t see this being much of a threat although it might provide some nice competition for next and same day orders.
If amazon's big plan is to gain a monopoly like status , which many investors think it is, this competition and price erosion is a big threat both to future amazon and it's current investors.
And hurting the stock is a good way as any to hurt a company.
Especially when the author could actually do an apple-to-apples comparison. The shoe organizer that cost $18 at Google (with shipping) is $16 at Amazon http://www.amazon.com/dp/B001M2D9D0
Free shipping on both products puts it at $13.24 on Google [1] and $16.17 on Amazon [2]. But yes, my post could have been much more objective and scientific.
Mixed metaphors, n=1, and the shock of the new. The interesting thing here is that Google seems competitive on item choice and offers Amazon some meaningful competition.
I'll post this here, since his site would not let anonymous posting go forward (might be a discuss issue).
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Ouch, this is a really sad comment on Harvard these days; I'd be ashamed if a 14 year old made this qualitative vrs quantitative category mistake. (Which you since fixed, but please - it should never have been written).
Try looking into GOOGs shipping network, and compare it against AMZNs. Since we have long term data on AMZNs model (including $775 mil on a robot production facility):
1) Is GOOG outsourcing or doing this internally?
1a) If not, who are they using?
1b) If they are, where is the spend in their yearly budget reports? (Not seeing it)
2) Can they match the coverage that AMZN has?
3) Can they match the volume that AMZN has?
4) Can they hope to catch up before AMZN makes the robot jump it's planning?
And so on.
You're almost an adult - try to analyze the world a little closer, you're allegedly the elite of America.
Is HN really this naive? This is terrible, if this was from an Oxford or Cambridge student - well, sorry, I'd hope they couldn't produce this level of immature nonsense.
And yes, I suspect you'll "down vote" - but sometimes a short sharp slap should be required.
Oh, and the heavy use of trackers is both intrusive and unnecessary for a private site. You're not providing any service, barring selling yourself, which should again make you pause at the "whys" of using the trackers you are.
OP appears to be extrapolating his money savings incorrectly? They base their savings off of one purchase and its cost difference. There are a ton of things I buy off Amazon that are significantly cheaper than big box stores, most of them electronics / audio related.
I've been using Shopping Express for a while now, and can say that's definitely not true. Many of my deliveries have arrived while I'm at work.
When you place an order, there's a checkbox to indicate whether you want to require a signature, and a blank field for delivery instructions. It's up to you: if you don't request a signature, they'll happily leave your order wherever you ask them to.
(UPS/FedEx, on the other hand, will just leave a delivery note on my door. Depending on how risk-averse the sender and driver are feeling that day, I can sometimes leave a signature for the next delivery attempt.)
This makes it ideal for cities like NYC, where most people do not have doormen to receive packages and thus need to be home to sign for them. Being able to schedule a window for delivery would be most useful, rather than having to be home when the mailman comes.
Interesting subject. I just wish the author had done a deeper study. One user, one product bought = one article written. Wow, the standard for internet writing is really low...
When Google Shopping Express can offer two day shipping to the entire country, then I will be impressed. Why is the author comparing two different products that are not even made of the same material? I can go buy a faux leather wallet for $5, and turn around and buy a $100 quality leather wallet somewhere else. When it comes to wood, if you want cheap, you can get cheap. When you buy cabinets for your house, you do not go with the cheap particle board, you go with the solid wood. Google is great in many things, but when it comes to customer service, Amazon wins hands down any day of the week.
The author compares buying a shoe rack on Google Shopping Express to buying on Amazon. He is impressed that a plywood laminated shoe rack sourced by Target is only $12 while a bamboo shoe rack on Amazon is $20, and makes much of imagining, zomg-like, 50% savings on his Amazon purchases over the year.
If you look at the same Amazon search results page where the author finds the bamboo rack, there is a serviceable resin rack for $13 (the author is obviously not going high-end with his plywood one). Four results down from his bamboo rack is a natural wood rack for under $16.
The real gorilla horse in the room is that the author goes on to lament $5 shipping for Google, which swamps any savings he was getting by going with inferior product. "Now, Google has to make sure its free delivery thing becomes well adopted the way Amazon Prime was, because the $4.99 delivery was a non-starter for me, and ruined the economics."
Twist ending?