It's crazy how competitive Wall Street views Amazon moving into a market; have there been examples of Amazon making a large purchase/move but completely failing? (sure there are, just not coming me off the top of my head)
They tried to make a move into retail registers to compete with Square, and failed. They shuttered Amazon register in 2015: https://bits.blogs.nytimes.com/2015/10/30/amazon-shutting-do...
They tried to take on Etsy with Amazon Handmade which bombed Etsy stock, but Handmade has gone pretty much nowhere, except some re-branding this year.
People just forget Amazon's failed ventures, even fairly high profile ones, because there are so many, and the hits sometimes so large (like AWS).
Quoting myself from April:
> Amazon's ethos of "Announce fast, Release fast, if it fails, oh well" is intentional. From Bezos' point of view, this is actually a feature. In a shareholder letter in 2016, he called Amazon "The best place in the world to fail." He wants lots of teams working on lots of products, and if some of them don't pan out, that's OK. This has lead to a lot of successes, but also a number of small headaches for consumers who use products that are quickly discontinued and (charitably) forgotten.
Is severely damaging another online vendor really a failure for Amazon? It seems to me at that level, revenue from a venture is not always the only measure of success.
Disclaimer, I'm long SQ.
If you're following AMZN, SQ, or PYPL, you probably saw the headlines back in April:
Amazon's Next Mission: Using Alexa to Help You Pay Friends
Firm looks to make voice commands the next wave of commerce
SQ and PYPL took a small dive on this news, even though at face value, its quite silly. Amazon would probably have a much better time trying to buy PayPal for Venmo or Square for Cash App but also to compete in the small-biz transaction field that Amazon tried and gave up on. Building out such a service based on Alexa users is wacky, and there doesn't seem to be a pressing need to let loose your wallet via voice.
Personally, I think it's somewhat unlikely that AMZN would acquire PYPL due to a clash of cultures when it comes to customer service. (Amazon's: Very good. PayPal's: Legendarily evil). This reputation may also be the reason PayPal has kept their own name off of their Venmo acquisition product until very recently. I think there is a very slight chance that AMZN would try to acquire SQ. It would allow them to really break into small-vendor retail where they have failed with homegrown solutions before, and give them instant access to a growing P2P transaction market. Everybody loves to speculate about such acquisitions, though.
...But it would certainly be funny if the only reason Amazon made that press release was to butter up one of those two companies for acquisition, either by decreasing their share value or exerting pressure on them internally to agree to a deal before they face Amazon's competition.
Yes because while Etsy stock dropped by 60% to less than $10 it has recovered back 42 dollars about 3 years later.
> "If you double the number of experiments you do per year you’re going to double your inventiveness."
> "If you decide that you’re going to do only the things you know are going to work, you’re going to leave a lot of opportunity on the table."
It may not be failure but I doubt it will kill or disrupt the grocery business.
There won't be wide adoption until the customer gets a perfect order with no substitutions or blemishes every time. The psychology of perceived loss at not getting EXACTLY what was ordered is too great. Until then millions of disappointed people will discourage others.
Items are well packed but not excessively (Google Express once sent me a bubble-wrapped bottle in a giant box for when I just ordered peanut butter - talk about waste).
Frozen items have cooling packs that are reusable and recyclable (pure ice + plastic skin) - and (this was actually useful) frozen drinking water bottles (useful packaging!)
The quality of the groceries were good. Unlike Safeway where sometimes I got what looked like older veggies.
My (more extensive) experiences with both Google Express and Safeway were inferior in little ways. I want to hate Amazon, but they're doing great for grocery delivery.
This is pretty much exactly what I would do if I was at a job where: 1) I didn't care at all and it was temporary 2) I'm also getting paid nothing to do it. So I can't really fault the delivery people in this situation.
The TL;DR is that there is just no margin when it comes to food. Grocery, restaurants, meal kits, etc. People keep trying to deliver these experiences to your home, and having spent 5 years cooking in a restaurant and my entire childhood growing up on a farm I've reached the conclusion that it can't be done. Once you add in the cost of human labor for physical delivery, the margins go from slim to negative.
I think you (and I) might be in the minority here and not their intended market. I don't know anyone with experience cooking who would prefer any meal or grocery delivery services over just doing it themselves. They're probably only focused on the market whose only previous alternative is instant/frozen meals or takeout.
To us: Shitty delivery + mediocre quality = Net negative
To their intended market: Delivery on par with take out + quality that's better than take out = Net positive
A very convenient experience, and it gets a lot of people doing the order online.
Once you have that, and if you can convince people to get their orders at a fixed weekly window, you get delivery density, which is key at lowering shipping costs.
And as far making delivery times convenient in this method - you need to loan your customers a passively chilled box they can put on their porch, so they can pick the deliveries when they come home.
Maybe Amazon could have done this while skipping pickup. But since it's less convenient , it's hard to convince people to pay more, and maybe competitors are cheaper.
But going straight away to on-demand deliveries, with 2 hour delivery time? Sure, that's crazy.
As a merchant, it was amazing. They offered promotional rate of 1.75%, which is basically impossible to beat for any small business.
For context, Square and most "simple pay per swipe" merchant service providers charge 2.75%. If you go out and get a really good deal from a intrchange+ provider, you might be able to get your rate down close to 2%. But Amazon Register got you below that with significantly less hassle, no subscription fees and a $0 equipment cost.
My wife used it at her small business for a year, and during that year I loved getting proposals from other banks and merchant service providers. Many had an offer like, "Let us audit your merchant fees, and if we can't beat them, we'll give you a $200 gift card."
I always gave them the opportunity to try, but with the caveat that there was no way they could beat our current rates, and I wasn't going to take their money when they failed. Mostly, I just never heard back after they realized I wasn't BS'ing about the fees we were paying.
If Amazon Register had been more widely promoted, they could/should have been able to get every credit-card-accepting small business in the country signed up at least for the promotional period. I'd love to see some kind of post-mortem to explain why they didn't.
The rate seems like it was just imaginary. Their promotion was that Amazon was willing to lose a significant amount of money to gain market share.
Basically the modern tech titan mantra. The only company out of the big 5 that isn't doing this is Apple.
They fail a lot of the time, but sometimes even when they do, it's a kick in the ass to some of the other competitors in the field, which causes them to depress their margins. So sometimes, even if Amazon's presence in the market fizzles out, they end up still reducing other's prospects.
[1] http://www.macnn.com/articles/09/10/28/google.maps.helps.gps...
[2] http://www.businessinsider.com/googles-free-gps-service-crus...
Garmin's automotive segment revenue has dropped from $2.5-billion in 2008, to $700-million in 2017. [1]
They've been able to largely make up for it with revenue from other sources, [2] (mostly outdoor/fitness) [3], but I'm sure that shift and innovation was driven by the event you mentioned.
[1]https://www.statista.com/statistics/217901/net-sales-in-the-...
[2]https://www.statista.com/statistics/217907/net-sales-of-garm...
[3] https://www.statista.com/statistics/217905/revenue-distribut...
So in my case, I paid money to Honda who in turn paid it to Garmin for something I'll never use, just so they can say it "comes with Navigation".
I wonder how long that will last before no one cares if a car comes with navigation.
I've already seen high end cars being sold without navigation, and just marketed as "smartphone ready". I suspect in a few years either all the cars will be sold that way, or they will all be self driving and get their navigation elsewhere.
Automakers want to control the quality of the user experience. They can do that better by partnering with a company that specializes in that sort of thing.
https://glinden.blogspot.com/2006/04/early-amazon-auctions.h...
Another guess is that changing habits(especially since buying drugs is an infrequent event, and that we're dealing with seniors) and creating trust we're other reasons.
But the main issue with drug delivery is the need for reliability; you can't have somebody's heart medication ship out late or get lost in transit, basically ever. And if you change offerings or go out of stock on specific products (which most retailers do often), you'll quickly be seen as an unreliable way to get any kind of regular medication.
Plus, you can't let any fakes or low-quality products into your supply chain - so sourcing new suppliers is hard, but running out of suppliers for any single product is a crisis.
So being an online seller for use-as-needed prescription meds might be easy, but the bulk of the money is in people taking drugs daily, and that stuff is damned hard to offer.
Amazon is reliable, sure, but what do they have - 99.9% fulfillment, 99% on time, 99% with authentic products, 97% of listed products in stock? Those are guesses, but apply those numbers to delivering vital daily medicines and the problem becomes pretty obvious.
Keeping in-stock rates high and "on time with authentic products" rates near 100% is not an easy task. It's not something pharmacies do perfectly either, but their shortages are generally at a store level rather than national, and they're not asking people to completely switch delivery mechanism to trust a space with online one provider.
Basically, the largest potential market for you is not tech savvy at all and makes it hard to convert.
I think there’s a big opportunity for insurers to pick a default mail pharmacy that customers out of. So depending on your insurer, the EMR automatically files with a pharmacy you don’t care about and mails it to you within 24 hours.
Looks like it’s already happening, albeit in an opposite direction, with Aetna acquisition by CVS.
My doctor sends short term stuff to a local pharmacy for me to pick up, and my daily long term pills to Optum, who charges my CC and mails them to me. They take about a week to arrive, but you can set it up so they automatically recur, so you always get your next 90 days before your current pills run out.