I am by no means insightful. Nor am I a seasoned business analyst or strategist who can divine the moves behind the curtain of the shadowy corporate world.
But Amazon’s latest move—to offer free overnight shipping on certain items the day before Christmas—stirs something within me. Call it a publicity stunt or whatever you want, I think it’s one more step on Amazon’s stairway to world domination.
Ever since I read The Everything Store by Brad Stone, I’ve been so fascinated with the story of Amazon (Amazing? More like Amazong! Okay that’s enough from you, right brain).
I’m going to put on my business analyst hat real quick and say that the one day shipping is not just a publicity stunt. Over the past couple of years, we’ve seen faster and faster shipping times from Amazon: from a couple days, to two-day Prime, to drones within the hour.
One limiting factor to any online retailer’s speed of shipping has got to be location. Amazon has what they call fulfillment centers (FCs), which are huge warehouses filled with everything from dildos to Dum Dums. Back when they only had a handful scattered across the country, shipping times were on the scale of a week. Now there are decidedly more.
(Incidentally, one of the big reasons there aren’t FCs in every state is because Amazon didn’t want to pay taxes in less populous states. Recently, the government cracked down on that, not for lack of trying on Amazon’s lobbyists and lawyers. But now Amazon is “free” to open FCs wherever they damn well please).
With more FCs comes faster shipping times. I believe the end goal is to have an FC on the outskirts of every populous US city so delivery times can be literally within the hour.
Of course, the other limiting factor is stock. Let’s say you’re Amazon in twenty years and have achieved that end goal (okay, maybe ten years). What if an item becomes super popular and gets all bought up? Then you’ve failed on your offer to deliver within the hour.
What you have to work on is predicting how much you need to stock in your FC for its particular customer base so that it will always have what it needs. Austin will likely need more ironic mustache triangle t-shirts than Miami (sorry that was my one allotted hipster dig).
I think this is what Amazon is playing at here. My guess is that they’re stretching their predicting muscle and calling their shot on the holiday best sellers. After the holidays they will likely take back this data and ask themselves, “Okay, what did we get right? What did we get wrong? How can we improve our prediction to never run out of stock in a local FC?”
Make no mistake, they’ve been refining these predictions since day one: it’s table stakes for stocking efficiently. But I think this is a big event, other than the mere fact that now I can get my dildo before Christmas.