Google is Creating an Amazon Prime Competitor | Hacker News Reader

Google is Creating an Amazon Prime Competitor

online.wsj.com

70 pointsAntelope36 comments

With these companies constantly getting into each others' business, I'm reminded of the old joke:

Heaven is where the police are British, the lovers French, the mechanics German, the chefs Italian, and it is all organized by the Swiss.

Hell is where the chefs are British, the mechanics French, the lovers Swiss, the police German, and it is all organized by the Italians.

In just the last three years, Google has gotten into mobile devices, social networking and now allegedly e-commerce, Amazon now does full-on computing devices (with Google's OS) and Microsoft has the #2 search engine. This is getting hard to keep track of. And no wonder everyone keeps expecting Facebook to come out with a phone.

This report seems like the oddest one yet. Does a shipping service even qualify as organizing the world's information and making it universally accessible and useful?

Maybe all these companies have no other choice but to compete. If they had they would have found some way to prevent too much competition.

But the core of amazon, google and facebook is: gather all the consumers and their data , and market or sell them stuff.

And the other half of the business is: build marketplaces for vendors , be it books, physical products , ads , etc.But that's relatively easy[1], once you have the consumer side.

[1]for digital products, it's easy: if you have buyers, sellers will flock to your door and infrastructure is relatively easy.

For physical products you can build your own(amazon), you can partner with providers(current google effort) and you can partner with logistics provider(ebay). So even for physical products , it's not that difficult.

I think what Google wants to do is fully integrate product listings with their search results -- which, they already do in some limited capacity. The best way to do a really good job of it is to have the sale of those items integrated entirely in to Google's "platform." All the other pieces, such as Google Checkout, are already in place and mature.

If Google ships, they know an item was sold and who bought it. They know everything. Their listings can be on a CPA basis rather than CPC for the advertisers (merchants.) The cost for shipping probably could be absorbed by the merchant in much the same way that merchants pay for advertising in the first place.

In the short term, it probably doesn't make much sense. In the long term, Google is probably more interested in cutting out the retail middle man then they are competing with Amazon.

One thing that Amazon does is shove a load of adverts, i.e. leaflets, into their parcels. Given that Google is also a behemoth in the ad industry, this might just make sense.

My family has never had ANY leaflets in our parcels, and we've been ordering off amazon for years now.

I've been a Prime member for 3-5 years, I guess, and we've gotten dozens and dozens of them through the years. I can say that I cannot actually remember the last time I received one. I can, however, remember that it was a "Cell phones for servicemen" or something like that.

Like all leaflets I just put them in the recycling. Never looked at them.

My most recent order from Amazon UK had three leaflets: a voucher for Naked Wines, a voucher for Ocada and something else that I can't remember. Most orders I get from Amazon have at least one leaflet, it's the same for other online retailers, such as Play.com.

I've noticed in the past that Google has special provisions for: Navigation, Autonomous Vehicle Control, or Enterprise Applications in the terms of use - http://code.google.com/apis/maps/terms.html - 10.2c.

Google has all the data to know the exact steps between the location of the product in inventory and the location of the doorstep of the customer. I could see them reducing cost of delivery in the following ways:

1. Using automated routing tools to allocate delivery resources in real-time. Currently, a human dispatcher can account for up to 35% of the cost of a same-day local delivery. Straight from an algorithm to a mobile phone is cheaper.

2. Using delivery contractors to collect video data to help build in the direction of an even richer google maps street view.

3. Eventually using autonomous vehicles to replace the human driver. I'm not saying this will happen any time soon, but I could see certain sections of city roads being approved for autonomous vehicle use in the next 3-5 years. Especially if google is pushing it while demonstrating safety. Paying a human driver can account for up to 60% of the cost of a same-day local delivery.

Also, there are some intangible aspects of having the relationship with a customer at their doorstep. Creates some advertising opportunities and gives nice contextual data about the customer.

Anyhow, being fairly familiar with the space I think Amazon and Google moving in this direction will really evolve online retail. More shipping options on products; more goods being shipped locally (for cheaper); more control over the delivery chain; visibility of exactly where your package is on the way to your house. That is the kind of innovation we can expect to see if google finds a way to leverage its data towards lower delivery cost.

How would that autonomous delivery vehicle make it up the stairs to my apartment?

I would think that some incentive (say a cut in 20% of the delivery cost) might convince you to get /down/ the stairs from your apartment.

If I were there, perhaps.

If we are talking true autonomous delivery then I guess scheduling it when you're around should be the least of our concerns.

Delivery services have been using routing software for years. UPS got a bunch of press attention for it several years ago. The concept of a crusty old lumbering behemoth that won't embrace new technology is largely mythical.

Market disruption doesn't involve increasing efficiency, the incumbents can always increase efficiency the exact same way you did, on a massive scale. You have to somehow alter the market itself, change what the customers expect.

"Delivery services have been using routing software for years" - yes, but not on a real-time basis. Solving real-time resource allocation vs routing a driver on pre-scheduled deliveries (like UPS) is a different problem with more complexities.

E-courier in the UK (http://www.ecourier.co.uk/) is one example of such a tool implemented at scale - they've demonstrated lower cost and compete successfully on lower pricing. And, guess what one of their founders just left to do? Basically created the UK version of Amazon Prime+ (http://www.shutl.co.uk/), leveraging the E-courier delivery service for efficiency..

Often the way to alter the market is to lower cost below a threshold where new utility can be provisioned to customers.

Until Google demonstrates that they understand how to handle customer service I will never use this service. Google is horrible when it comes to dealing with customers.

Exactly. We use Prime a lot, and for Google to convince us to switch, Google's gonna have to become a completely different company.

Aside from having a lot of stuff, aside from it all being at great prices, we also know that it's backed by a company with amazing, second-to-none customer service. I've had to call up Amazon just once, for some hard-to-find solderable fuses for a special client project. The first batch I ordered shipped on time but never showed up; the client needed the machine back the day after the fuses were due to arrive. I called up Amazon to see if I could arrange overnight delivery, and not only did they do that, but they didn't charge me anything for the shipping or for the second batch of fuses. They just asked me to ship back the first batch when it finally showed up, which I did, a few days later.

Google meanwhile has a pretty rough reputation when it comes to customer service. Their attitude seems to be that "customer service doesn't scale". I think Amazon pretty handily proves that wrong. I find it difficult to believe that Google is going to be the next Amazon -- they just don't "get" people.

There are a few companies that have my undying loyalty because they've gone out of their way to be great before some competition has forced them to. Amazon is one of those.

I read somewhere that Jeff Bezos considers it a bug in Amazon's customer service system when a customer has to get in contact with them.

My impression of Google is that they feel the same way, but haven't figured out how to gracefully handle the errors those bugs cause, while Amazon has.

I've never needed Google or Amazon's customer service, though, so I'm basing my opinion on what I've heard from others.

It's a good point. Extending the analogy out a bit, Amazon has fantastic instrumenting that let's them see failures in their system, debuggers, memory inspectors, object lifetime inspectors etc.

while Google isn't even bothering to print most of their errors to the console. They have very little idea how their customer experience is other than sales numbers and they appear to pretty much ignore the few places they do directly interact with end users in their forums. The GAE pricing nonsense was one of the most insane customer interaction spectacles I've ever seen.

It's funny, about the only time we've ever seen any sort of input/output with Google has been here on HN with the few Google employees that haunt this forum, checking out problems this community is reporting.

> Google is that they feel the same way, but haven't figured out how to gracefully handle the errors those bugs cause, while Amazon has

That's because Amazon sees you as the customer, while Google sees you as some type of a cheap-commodity/product to be sold (via click-throughs) to the real customers, the advertisers.

Google has burned many many people with their complete disregard towards us, including myself...

From what i understand ,in this effort , google only plans to be a search engine for companies who offer one-day shipping e-commerce.

I wonder if this is just google saying "get of my lawn" to amazon with regards to android.

If all Google is offering is a filtered Google Shopping, then I doubt many people will use it.

Another part is I think they're trying to drive adoption of the Google Wallet/Checkout payment system, which also has a beneficial effect to other parts of their ecosystem such as Youtube, Android/Google TV etc.

If there's one thing Amazon could use improvement on, is it's search results. Specifically, sorting them.

Seriously, I just tried it now. My complaints:

- Why do I have to pick a department to sort? (I can kind of understand this, but it's annoying)

- Why isn't shipping taken into account when I sort?

- Why are used and new prices mixed when sorting?

While I understand that Amazon can't read my mind, there are certain product categories (cell phone cases, for example) where it's like panning for gold. You need to spend a non-trivial amount of time digging for a quality case for a good price.

I don't have a solution, but it certainly feels harder than it needs to be. Searching on newegg.com feels so much better, but I suppose they have the advantage of having a very narrow focus.

Agree completely re: Newegg, and yet their lack of Prime and CA sales tax mean I never ever ever shop there anymore. The tax thing makes it a really unfair playing field and should be fixed.

ShopRunner (http://www.shoprunner.com/). It's basically Prime for Newegg and a bunch of other stores.

Unfortunately the tax problem still stands.

Also, sorting by reviews is broken (in the sense of being useful). A product with a single rating of 5 stars should not be ranked above a product with 1000 five-star ratings and 1 four-star rating. It's a really easy problem to solve too...

The silly thing is that IMDB figured out ranking in 1997 by using a beysian posterior mean: http://en.wikipedia.org/wiki/Internet_Movie_Database#Ranking...

(guess who has owned IMDB for over 10 years?)

For awhile there was this general sense that Google was doing a little bit of everything and getting involved in everyone else's business (the root of the "what if Google decided to enter this market" question).

However, lately they've been making the news for the products they're no longer focusing on (Wave, other Labs, etc.). Could it be that with things like the UI refresh, Google+ and a shipping service (and a host of other initiatives), they're attempting to connect more with people and put out a "human touch"?

Google is dipping its hand at EVERYTHING I wouldn't be surprised if it would go and compete with a custom cupcake business soon (taste graph + location + social "share my cupcake" potential)

While that is true, I am happy to see some serious (possibly) competition in this area.

Google sure looks like a company trying to fight too many battles. They are trying so hard to make everyone their enemy that I think they will eventually find themselves without any friends.

A client gave me an earful just yesterday because I recommended using Google Chrome instead of Internet Explorer; she felt like Google was "too big" and didn't trust them anymore. I tried explaining that Chrome was a safe product anyway, but she wasn't having it.

I don't think this is a widespread problem, but it might not be too far away.

Firefox is the safe alternative here. For years, I've setup users with Firefox, and IETab for those specific (now mostly intranet like Outlook web mail) sites that play better with IE.

Some folks grok Chrome, and that's good... but it's for more savvy/advanced users.

Expect grey cupcakes with lots of whitespace, confusing sprinkles navigation, and you can only talk about them in Google+ (deprecation of mouth as a communication api).

This has to be a part of the Google Check out, which means the vendor integrating the API must opt to honor it (assuming they do not make it mandatory). I don't understand why vendor's would want to participate in it though. It does not give them any competitive advantage over their competitors since this is available to everyone else. So unlike amazon where they have a lock-in advantage with Prime, Google is not really offering it to its customers.

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