business news in context, analysis with attitude

Interesting column in the Boston Globe this weekend by Scott Kirsner, in which he says he did something "evil" last week: "Instead of walking two blocks to the Staples near my house to buy printer ink, or 10 blocks to my neighborhood bookstore to pick up a paperback that a friend recommended, I placed an order on and selected the 'same-day delivery' option. Just over nine hours later, an Amazon box appeared on my doorstep. The convenience cost me $11.97.

"Why do I say evil? Because I appreciate having stores in my neighborhood that keep the main drag vibrant and participate in the life of the community. And Amazon’s same-day service is just the beginning of a new wave of experimentation that could pose yet another Darwinian challenge to brick-and-mortar businesses of all sizes."

Kirsner notes that "eBay and Google are also testing the waters - though not yet in Boston - and last month Walmart hinted at an intriguing strategy that would involve inviting its customers to become volunteer couriers. In the same way that e-commerce and the digital delivery of books, videos, and music led to the demise of lots of companies (remember Mike’s Movies, Strawberries, and Borders?), this feels to retailers like a new threat."

Now, Kirsner concedes that there are plenty of arguments in the marketplace for why same-day delivery won't work, though most of them seem to hinge on the likelihood that it will simply be too expensive to be a sustainable business proposition.

But, he says, this may reflect a lack of imagination more than anything else: "Let’s fast-forward a few years. Amazon has already acquired a North Reading company, Kiva Systems, that sells warehouse robots that help fill online orders, and Amazon chief executive Jeff Bezos is an investor in a Boston company, Rethink Robotics, that makes a dextrous, two-armed robot named Baxter. Google is developing a self-driving car. Several companies, including a new Harvard Business School start-up called Daedalus Systems, are considering using airborne, battery-powered drones to deliver small packages — once the Federal Aviation Administration establishes guidelines.
In other words, the FedEx of the instant gratification age may not need pilots, distribution center workers, or drivers on its payroll."
KC's View:
Ironically, the Los Angeles Times reported over the weekend that Sport Chalet, the sporting goods chain, "s now offering same-day delivery service, hopping on a crowded bandwagon that includes Amazon, Wal-Mart, Google and eBay ... The new program is in place in most of California as well as in the Phoenix, Las Vegas and Salt Lake City areas."

The move is seen as a value-added service that will enable customers to make both purchases and returns without having to actually go into the store ... which Sport Chalet sees as being a differential advantage for the company as it competes both with other sporting goods chains and online retailers.

Traditional businesses and traditional thinkers will come up with all sorts of reasons why this can't work. And while they do so, innovators will be figuring out how to make it work.

And another one will bite the dust...