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Tag: amazon

It’s a Bird, It’s a Plane, It’s an…Amazon Drone?

 

It looks like Amazon is serious about their newest plan for speedy delivery.

 

Their Prime Air program has been discussed before, but it looks like Amazon is taking steps to launch the program in 2015, if they can get approval from the FAA to begin testing.

 

Prime Air’s goal is to speed up the already lightning fast Amazon delivery via the use of drones. If you haven’t heard of this before now, here is a quick video showing how it might work:

 

 

 

The idea is to offer a 30 minute delivery of Amazon purchases, making it by far the quickest way to shop online.

 

At the current point, Amazon is requesting permission from the FAA to test this idea. However, there are many factors in play that will need to be worked out revolving around safety exemptions to the FAA’s restriction on commercial use of drones. However, it looks like Amazon is really trying to make this a reality in the next generation of online shopping.

 

In addition to offering speedy delivery, the company claims that the use of drones will reduce shipping costs to the company, which they claim are currently $4 billion per year.

 

While this concept is fun and interesting, and there is no doubt it would be quite the sight to see a drone delivering your latest Amazon purchase, but how necessary is this? Have we really become a society where we need our purchases within 30 minutes?

 

I’m all for companies trying to enhance their services, but this is a program that might be a bit overboard. I’ll be curious to see the next steps, and eagerly await 2015 to see if it becomes a reality. This is no small undertaking – if any company can manage it though, it’s Amazon.

 

 

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How Amazon Turned Customers Into Salespeople

 

Most companies know that product reviews can make or break a sale, and that customers have come to rely on word of mouth reviews, feedback, and opinions when making purchasing decisions.

 

Amazon has taken this a step further and turned to their customers to provide that much needed information that can push customers to making a purchase.

 

Their “ask a question” feature allows customers browsing items to ask a question that will be answered by people who have purchased the item. When looking at products on their site, you’ll see a “ask a question” or “XX number of questions answered” for each product:

 

amazon question

 

 

Clicking on the link allows customers to ask a more detailed, “nuts and bolts” type question that might be the one factor in deciding to purchase or not, and customers who have bought the item can respond.

 

In the example of above, questions ranged from “Does it play DVD’s that have been burned?” to “Does this DVD player remember where you left off”” to the more technical, “I have an old Panasonic TV. Will this work with it?”

 

Amazon realizes the importance of product information and providing enough information, in as many ways possible, to educate and encourage sales.

 

Of course, customer buy in to participate by answering questions is an important component – if customers don’t reply, potential buyers may not get the information they need. Similarly, they could get the perception, based on the lack of activity in this area, that the product is not popular or one that many people purchase. One way Amazon tries to prevent this is by routing these questions, as they come in, to customers who have purchased the item. Often times customers will be happy to share their feedback. As an added benefit – those customers may become more loyal to Amazon, as they company turns to them for insight and feedback on a personal level.

 

While not a new feature, it is one that is picking up steam, and is a great example of finding new ways to encourage sales and engage customers, as well as potential customers.

 

 

 

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All Good Things Must Come to an End

 

And, according to Amazon, that means the end to lower cost Prime membership.

 
The company recently notified Prime Members that their annual memberships will go up by $20, citing increased fuel and transportation costs as part of the reason.

 

Amazon letter

 

 

 

Prime members whose subscriptions renew prior to April 17th may not see this increase, at least not this year. However, if your membership expires after that, be prepared to pay a higher fee. You may have noticed that Amazon also (quietly) raised the minimum purchase to $35 from $25 to qualify for free shipping.

 

There are rumblings online, of course, about this increased fee. Some are unhappy, while others see it as a necessary increase, as the company has not raised this cost since its inception.

 

Amazon has a good thing going, but all good things must come to an end, or change, to continue to keep Amazon at the top of their industry. In December, I recall Amazon boasting about their one million (or close to it) new Prime membership subscriptions. While quite impressive, I wonder how many of those customers took the trial to help with their holiday shopping, especially if time got away from them and they were doing a lot of last minute shopping, and then canceled before the trial was over. That might play a part in Amazon’s decision to raise prices, as this may have cost the company more than they anticipated, hoping that more of those free trials would turn into subscriptions.

 

I also think they pushed the envelope a bit with their promotion where customers could order as late as December 23rd or 24th and get same day delivery. With a Prime Membership, the additional cost for this was very minimal as I recall.

 

The factors above, coupled with the ever increasing cost for such things as fuel and transportation, likely played a part in Amazon’s decision. They do have a great model, and I’m not anticipating that the company will see a huge fall off in their Prime Members. Today’s customer is so into immediate gratification and quick purchasing processes that I think Amazon still has a good thing going, but perhaps they pushed it too far during the holidays and are now seeing the need to scale back and make sure their processes aren’t hurting them financially.

 

What are your thoughts about Amazon’s price increase? Necessary or greedy? Do you think that their holiday push hurt them in any way? We’d love to hear your thoughts – comment below and join in the discussion!

 

 

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