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…
Leave a CommentMonth: October 2017
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 CommentHere is a New York Times article by Farah Stockman that focuses on the story of a steelworker Shannon Mulcahy who had to go through the unenviable task of training her replacements when her job was outsourced to Mexico. It is good to see that journalism is alive and well. Stories that focus on one person are illustrative in the same way as business school case studies that focus on a firm. Shannon especially represents the admirable traits of every-day Americans: charity and decency. Outsourcing decisions are terribly fraught with real human costs, especially when there are few other economic opportunities for those whose jobs are outsourced, with no political solution on the horizon. I wanted to mention a few points that…
Leave a CommentI saw that NYRB tweeted about the new quote page for The Peregrine recently. It reminded me of the wonderful book by Helen Macdonald called H is for Hawk (and the notes I wrote down about the book sometime in September 2016). – I read H Is For Hawk, in the midst of reaching for answers and missing them in a vacuum, much like the tone of the book. In the book, the author Helen Macdonald loses her father suddenly and misses him — his memories, his voice, and his presence in her life — and feels the pain of his absence, deeply and indelibly. She turns to falconry, rearing a Goshawk — a left-over dream of an 8-year old girl who…
Leave a 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.…
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