It is Cyber Monday – the biggest day of ecommerce in North America and the main benefactor of press coverage is Amazon.com. After watching the 60 Minutes interview that Charlie Rose did with Jeff Bezos, a few things come to mind. It is clear that Bezos is trying to do so PR work after the Everything Store written by Brad Stone made him seem to be a draconian leader. I dont believe in coincidences as the timing of this interview just seems to good to be true.
Timing is everything
As I have mentioned today is Cyber Monday and the 14 minute interview that Charlie Rose did can be seen as an advertorial as Bezos mentioned the normal lines “customer centric”, “we like to innovate” etc.
If you look closely at the video then Amazon fashion gets a favorable amount of time. AmazonFresh is also given some airtime and I must be honest – after giving it months of thought the fact that Amazon took 5 years to figure out a business model for the grocery business, that should scare competitors. AWS is a dark horse for me at the moment as Amazon has been reluctant to mention the size of the business and their partners that use the software platform.
Amazon sells books online: “That’ll never work” Amazon rents computing: “But they sell books” Amazon ships via drones: “Screw it, why not”
— Aaron Levie (@levie) December 2, 2013
Location, location and location
Amazon is clearly the furthest in getting close to their customers, which should also scare their competitors. I could not help but note that Bezos mentioned “7th version of fulfillment centers”. It is clear to me that every dollar that is invested into fulfillment centers is carefully documented and recorded for future usage. Experience is a hard earned human skill full of emotion, yet in business it boils down to planning and review sessions to ensure that a successful result is attained. The fact that they mentioned a New Jersey facility is being built puts that areas competitors into the spotlight.
Bezos manages the media to tell the story that he wants told. Words are carefully chosen and I would not be surprised is Charlie Rose had to provide the questions he wanted to ask Bezos. He is no Jobs but his charisma and direct to the point conversational way of communication is what makes him Bezos.
Amazon’s strategy: Scale –> lower prices + faster, cheaper shipping –> Growth –> More Scale Drones are just a form of faster shipping
— Erick Schonfeld (@erickschonfeld) December 2, 2013
Amazon is in my opinion flexing its muscles. Think about it – they have now put their competitors on notice that they are going to be doing drone deliveries. This is the first time that Amazon has gone to market with a concept before actually using it internally for a period of a year. Drones make a ton of sense as it can be controlled by software, will work until their batteries are flat and will compliment the convenience that shopping at Amazon has for its users. How will the FAA not approve this crazy idea? Amazon will ensure that they get this through legislation.
Amazon is also slowly showing their logistics partners, UPS and FedEx that it can cope without them. First they announce USPS as their weekend partner for deliveries for Prime Customers. If I worked in senior management at FedEX or USPS, this interview would make me nervous as the drones will potentially take a large amount of work away from both Fedex or UPS. Is this Bezos using network effects to bring down the purchase price for UPS?
The Pied Piper of Seattle, Washington
Bezos is the master of redirection. What has all this PR on the drones done? It has lessened the noise from protestors in Germany that has potentially massive effects for Amazon. Suddenly the negative press coverage seen in Germany has been placed in the back of the mind of the Amazon user in the US. That is classic Bezos.
The Pied Piper of Seattle, Washington has also been clearly showing us all, the importance of Amazon Prime. On the Amazon Prime Air page is 2 calls to action for Prime memberships which Amazon has not paid a single dollar for. Also the Cyber Monday deals can be clearly seen on this very same page.
Is this a step too far for Amazon? If you give Amazon 5 more years to develop the drones then I think it will be untouchable and 100% cost effective. Lab 126 will most probably have a wing building these drones. As time is ticking by, Minority Report seems to becoming a reality right in front of our eyes.