In 2014, Tech Crunch reported Amazon filing a patent for “Anticipatory Shipping”, i.e., getting the package ready for shipping even before a customer orders the package. The coverage on this issue has been minimal. Today, through a student (ht: PB), here is an article on Economist (subscription required) about German firm Otto using AI and machine-learning to purchase 200,000 items a month from third-party suppliers without any human intervention. The orders are made purely based on machine learning on 3 billion prior transactions and a variety of variables (weather, etc.). Two important factors stood out from the article. Customers are less likely to return if the product arrived within two days. Pre-shipping helps eliminate risks due to shipping delays. (There…
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The Amazon Cloud Cam and compatible locks. Photo Credit: Becca Farsace / The Verge Amazon has just released Amazon Key to Amazon Prime members. (I am not an Amazon affiliate, i.e., I derive no financial interest from the link). Amazon Key is a product-service bundle that includes buying an indoor security camera, and a compatible (electronic) smart lock on your door (totaling $250). Hardware is not dead yet. See detailed coverage at Verge. How does the Amazon Key delivery work? Amazon authorizes the delivery, then turns on the security camera, and unlocks the customer’s door. The customer will get a confirmation (via email/text) that his or her package was delivered. Customers can watch the delivery live or later through a recorded…
Leave a CommentI received an email note from a student in the Forecasting class (thanks: HT) about excess inventories of Snap Spectacles. The article on Information (subscription required) mentions that only (slightly more than) 150,000 units were sold and hundreds of thousands of unsold units sitting in warehouses. Snap contends that the sales exceeded their own expectations, but clearly the pre-sales expectations were high (as documented here and here). A lot of coverage was brimming with snark (some of it from the very folks who were excited about the product), and ex-post analysis of how bad the product is. I am no fan of Snap. However, I wanted to highlight a few points while providing a back-of-the-envelope framework to think about the…
One CommentWall Street Journal reports that Amazon has signed contracts with Apartment building owners and managers in order to install 850,000 locker units in apartment complexes. One of the challenges that remain in last-mile deliveries is “matching” delivery times with guaranteed time windows. Say, you need a delivery to be made between 1-3 pm on Tuesday. It is hard for a firm (i.e., expensive to accomplish, not mathematically hard) to make sure that the delivery occurs exactly in that window. Having some select products in stock at lockers in apartment complexes will address some of the “matching” problems. This is effectively like the consignment model in the medical devices industry. The devices are physically held at hospitals, but owned by device companies…
One CommentAn excellent recent article on Atlantic by Derek Thompson talks about how the History of Sears predicts nearly everything that Amazon is doing. I recommend this well-researched article as a great reading to understand Amazon in the context of how Retail business has changed over the years. Interestingly, this has been a point I have been stressing about understanding Amazon in the Operations Strategy Class (OIDD 615) at Wharton at least for the last 5 years. Here is the slide I typically show before beginning the Amazon discussion in OIDD 615 Class (the one below is from October 2016), while building up to the eventuality of Amazon opening more stores. I think that the theory is working out pretty well.…
Leave a CommentThis November’s Atlantic Issue has an interesting, humorous article (includes a bit of french from a Parisian cab driver) about the very first Costco in France. The location on the outskirts of Paris has apparently become “an unlikely hit in a city known for its refined tastes.” This is attributed to be surprising especially as a magazine called Costco an “American Mastodon”. Speaking Retail Operations, it is not surprising that a Costco superstore is welcome in France. They signed up 12,000 members in 10 days. (See the excitement in the video of Costco Franco opening, for yourself. Video Credit: Huffington Post France). First, the Costco France opened in Villebon-Sur-Yvette, which is about 30 km from where-ever one thinks the epicenter of Paris…
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