
Amazon Unveils One-Hour Delivery Service - spew
http://www.wsj.com/articles/amazon-com-launches-superfast-delivery-in-nyc-1418903192?mod=e2tw
======
morgante
I just placed an order with this new service (some HDMI cables for our
office).

The selection is pretty decent, definitely comparable to Google Shopping
Express.

One very odd note though: they ask for a variable tip to the delivery courier
(something Google doesn't do). So even for "free" 2 hour delivery, you're
paying for delivery. While I see how this is better for the courier, I think
it's a big mistake—people hate navigating the social dilemma of how to tip
properly, and solving social dilemmas is a key advantage of digital services.

~~~
SiVal
Tipping is a nuisance, something that goes in the "Con" category in a Pro &
Con analysis. The vendor is implicitly warning you that you shouldn't count on
getting good service included just because you officially paid for it. They're
warning you that they have no real control over their service providers, and
"it would be a shame if something unforeseeable, like getting caught in
traffic, were to happen to a delivery you were counting on", so you'd better
work something out with them privately and hope the "service" provider is
pleased with the result.

Like many people, I have a lot of options when it comes to who I buy from. I
now have to pay sales tax to Amazon, and there are often other vendors who are
cheaper, or charge no sales tax, or have stores five minutes away where
"shipping" is instantaneous and always free for even the smallest purchase.
Even so, I'll often pay more and buy from Amazon anyway because of their
service. Anything that reduced their service quality would shift some of those
purchases away from Amazon.

I haven't seen this new Amazon system for myself yet, so maybe there's no real
problem, but if "free" 2-hour delivery turns out to require air-quotes around
the "free" along with a nudge, nudge, wink, wink, "it would be a mistake to
disappoint me" attitude from the delivery guy, I'll use the system a lot less.

~~~
ssharp
The stores don't charge sales tax. The state mandates that they collect sales
tax. If the state doesn't mandate that the store collect sales tax, the store
won't "make" you pay it, though I think technically in most states, you're
still supposed to file those purchases with your state income tax and pay
then.

~~~
SiVal
If I can get what I want more cheaply from Vendor A than from Vendor B, the
question of whether Vendor B is charging me more as an agent of the state or
on its own behalf is unlikely to be relevant to the decision.

------
jcr
Just as Amazon is trying to use 1 hour delivery to compete better against
brick-and-mortar companies, Google is trying to help the brick-and-mortar
companies compete with Amazon by providing a competing delivery service called
"Google Express" (previously called "Google Shopping Express") [1]. It's been
mentioned a few times on hn [2,3].

[1]
[https://www.google.com/shopping/express/](https://www.google.com/shopping/express/)

[2]
[https://news.ycombinator.com/item?id=8037108](https://news.ycombinator.com/item?id=8037108)

[3]
[https://news.ycombinator.com/item?id=8452337](https://news.ycombinator.com/item?id=8452337)

~~~
jmathai
> Google is trying to help the brick-and-mortar companies compete with Amazon

I'm not sure that wording is accurate. Google is leveraging the brick-and-
mortar companies to compete with Amazon and collect more data about its users.
Arguably some of the most valuable data they could get; spending and buying
habits.

I doubt Target is thrilled that Google is looking to inject themselves as a
middleman between them and their customers. Target has historically leveraged
customer buying habits pretty aggressively [1]. I'd be surprised if their
execs aren't frantically trying to figure out how to keep Google from
"helping" them compete with Amazon.

[1] [http://www.forbes.com/sites/kashmirhill/2012/02/16/how-
targe...](http://www.forbes.com/sites/kashmirhill/2012/02/16/how-target-
figured-out-a-teen-girl-was-pregnant-before-her-father-did/)

~~~
notatoad
It'll be pretty easy for target to prevent google from helping them, they can
just decline to participate in the program. They are participants though,
which should tell you something about how target actually feels about the
program. And they don't lose any customer habit data, as customers still use
their loyalty cards through Google Express.

Almost all of Google's profit right now is derived from B2B relationships.
Providing services to other businesses is what they do. Yes, they make a good
profit while they're doing it, but to suggest the business who are google's
customers don't see any benefit from it is silly.

~~~
jmathai
Valid point. I'm not sure what "participate" really means though. Do Google
Express customers have to provide their loyalty cards? Does Target get all of
the data they'd get if the customer shopped in store or through their own
delivery service?

It would be silly to imply that Google's customers don't see any benefit as
they're obviously getting some revenue and data.

But it would be similarly silly to imply that Target participating in the
program doesn't mean they're concerned about it and not looking for ways to
handle the customer's experience end to end.

~~~
declan
>Do Google Express customers have to provide their loyalty cards?

No. I order stuff from Target via Google Shopping Express multiple times a
week without a loyalty card. I didn't even know Target had loyalty cards, in
fact! Also if you're logged into your account you go go here and see what
loyalty cards you can type in:
[https://www.google.com/shopping/express/#SettingsPlace](https://www.google.com/shopping/express/#SettingsPlace):

The list includes Costco, REI, Staples, etc. but not Target.

~~~
tmzt
Target offers 5% discount on purchases if you use the RedCard Debit (linked to
your bank account), credit, or Visa credit cards (no longer offered for new
customers.) Essentially, they give you the fees charged by the payment brands
and processors as a discount for using their card instead.

Target could compete effectively with the Google and Amazon offerings by
adding delivery to their Cartwheel app.

------
mooreds
It's hard for me to see how this doesn't hurt local vendors badly. Of course,
it depends on what the the 25,000 items are, but that was one of the key
differentiators between Amazon and local stores--if you needed something and
you needed it now, the local store was the only option (things like cabling
for a new TV, gifts for a party that night, etc).

Now, for prime members in NYC at least, Amazon is a viable option.

What other moats do local stores have? Amazon wins on:

    
    
       * selection
       * cost
       * convenience
       * reputation
       * knowledge (this depends on the local store)
    

What does the local store win on?

    
    
       * feel good factor (supporting local business and employment)
       * hold the item in your hand (not sure there is one word for it in English, but the Germans probably have one)
    

It's a draw on

    
    
       * I need it now
    

Interesting times, indeed.

~~~
dkrich
_What does the local store win on?_

I think in the long-run, it'll be price.

Sure, in the short-term, Amazon can do what they do and undercut on price, but
in the modern age, Wal-Mart has pretty much figured out the optimal model of
inventory storage/distribution and the model of keeping inventory on-hand and
having customers come to them enables them to do this at an incredibly large
scale and at razor-thin margins. Yet they are still margins.

As we have seen before, delivering products at that scale and selection via
delivery is extraordinarily challenging to do _profitably_. Amazon can do a
lot of things, but one thing I don't think they will ever be able to do is
bring products to peoples' doors at a cheaper price than Wal-Mart can store
inventory in large stores and distribute to customers who come to them. There
are just too many complexities around the delivery/customer service/quality
control processes to make the economics work out.

~~~
philwelch
Wal-Mart has the downside that you have to go to Wal-Mart though. I don't just
mean that in the dismissive sense that their stores are unpleasant (which they
are), but there's a fundamental mismatch between an urbanizing population and
a big box store in the suburbs that everyone has to drive to and lose their
car in a massive parking lot.

In fact, Sam Walton knew this. His mission wasn't to dominate the world of
retail, it was to bring the same economies of scale urban retail already had
to rural communities.

Keep in mind that physical storefronts have costs too. Wal-Mart has warehouses
too, and they're probably simpler, but when all you have is warehouses,
there's a lot of complexity you can add and still have a simpler, more cost-
effective model than employing battalions of people to operate cash registers
and stock shelves in thousands of small towns and suburbs across the country.

~~~
sillysaurus3
_there 's a fundamental mismatch between an urbanizing population and a big
box store in the suburbs that everyone has to drive to and lose their car in a
massive parking lot._

There are Wal-Marts all over big cities, though. Public transit takes you to
them.

Amazon's new service is more expensive than public transit. Also, you also
don't get any exercise when using it, whereas many people like going out for a
walk. That's a minor point though.

It's probably more accurate to say "There's a mismatch between Wal-Mart and
San Francisco." Possibly cultural.

~~~
philwelch
The nearest Walmarts to Seattle are in Renton and Bellevue. The nearest
Walmarts to New York are either in New Jersey or upstate. There are Walmart
"Neighborhood Markets" in Chicago, but the big box stores that they famously
scale with are in the suburbs. There seems to be a Wal-Mart in LA, but not
downtown, rather in the area that seems like a bunch of suburbs concatenated
together. There are a few in Houston, mainly in the suburbs that were annexed
to the city but there's at least one inside the 610 loop. (Having been to
Houston, it is also largely a series of suburbs concatenated together.) Those
are the four largest cities in the US.

By and large Walmart is a suburban phenomenon. They're trying to move into the
cities because they don't have anywhere else to expand, but the assumptions
underlying big box stores aren't going to hold up in that environment and
they're going to become just another brick-and-mortar retailer, with all the
costs that entails.

~~~
sillysaurus3
Hm, it looks like you're right. I should live in those places before talking
about them.

It just seemed odd to say that Amazon has an advantage where Wal-Mart doesn't.
The announcement says Amazon is offering the service in Manhattan, but there's
a Wal-Mart supercenter just 30 minutes away:
[http://i.imgur.com/oHS2h43.png](http://i.imgur.com/oHS2h43.png)

Do you feel Amazon can make good headway in dense city areas? It seems like if
Wal-Mart can't figure out how to organize distribution pipelines in a given
area, then Amazon wouldn't be able to, either. So I was just trying to figure
out what critical advantage Amazon might have.

~~~
philwelch
Wal-Mart has B&M locations that you travel to (and if you've seen a sitcom in
the last 30 years you know that "just go to New Jersey" isn't a popular
solution for New Yorkers). Amazon ships the stuff to you. Now they do it in an
hour, if you're in New York. That's as long as it would take to get to Walmart
and back, except you can continue living your normal life instead of driving
to New Jersey.

(Also, New Yorkers don't drive. So that Wal-Mart in New Jersey is closer to an
hour away by transit.)

------
BrandonY
Somewhere, Kozmo.com CEO Joseph Park is reminding someone that this is Jeff
Bezos's second attempt at one hour delivery, and that he was already doing
this for Bezos back in the 20th century.

~~~
mooreds
He's actually at Forever 21, so I assume he's reminding them:
[https://www.linkedin.com/pub/joseph-
park/3/710/a3b](https://www.linkedin.com/pub/joseph-park/3/710/a3b)

------
jtchang
I'm pretty sure the logistics of 1 hour delivery can get pretty insane.
However what I am really looking forward to is real time delivery anywhere.

And how about returns? Can I return stuff in one hour too?

~~~
ComputerGuru
Why would you want to? You can get the replacement or alternative products,
and every front to boot, and then mail it back within 30 days.

------
smackfu
I'm more impressed that the two-hour delivery is free.

~~~
bring1
so ordering in the rushhour times is the xpert play here then.

~~~
_xander
Surely customers will be able to choose 1 or 2 hour delivery before they make
their purchase?

------
guelo
What I don't understand about the big retailers is why they haven't been doing
something similar all along to compete with Amazon.

Amazon has been building warehouses all across the country near cities to
reduce shipping times. But the retailers already have what amounts to hundreds
of warehouses at every population center, plus the inventory management
systems. Why haven't they put their inventories online and offered same day
delivery to neutralize Amazon?

~~~
mynameishere
No kidding. The pizza delivery model would seem a no-brainer. You simply have
a few employees who know where everything in the store is (and can probably
fetch anything 10 times faster than a normal customer) and then batch them out
to drivers. It _seems_ like Walmart could service 100 million people this way
(with their entire inventory) just like Domino's _et al_ have been for
decades.

It's so obvious that I'm guessing they've done the math and it doesn't work.

------
Rygu
Just heard about Shyp yesterday. Seems like it's the same idea but selling the
concept of regular people helping each other for a more personal service (like
Uber, Lyft). I kind of like that approach.
[http://www.shyp.com/heroes](http://www.shyp.com/heroes)

------
free2rhyme214
What most don't realize is that Amazon is taking on Fedex, UPS, and the USPS
by doing it themselves for profit. This is actually very smart if you can
solve the logistics problem long term because this model can be leveraged in
many other cities.

------
Instacartlove
Having the ability to pickup and deliver from multiple locations throughout a
city like Postmates or Instacart does is a huge advantage. At least for a one
hour delivery. Density of drivers in a city is an important factor as well. If
you can route a driver to a location nearby instead of a single warehouse you
can be more efficient. Instacart and Postmates also both have high frequency
categories that they can use to leverage less frequent items, e.g essentials
over time and potentially at lower costs.

------
benatkin
Amazon could just have OnTrac create a product called One-Hour Delivery, and
have OnTrac claim that they tried to deliver but that the recipients weren't
home.

------
nateberkopec
This headline could've read: "Amazon relaunches Webvan".

Very interesting how ideas from the first bubble re: brick-and-mortar are
coming back.

~~~
lotharbot
Webvan wasn't the first ever grocery delivery service. Their failure doesn't
make in non-viable, it just means they didn't do it in a viable way.

I still see the dairy truck and the Schwan's truck in my neighborhood from
time to time. They're not exactly the same thing, but they've proven long-term
sustainability for some parts of the market. I also see home delivery trucks
for King Soopers (Kroger) and Wal*Mart in my area.

------
shalbert
How can they get to places within an hour and make a worthwhile margin of
profit?

~~~
cshenoy
They're charging $7.99 for one-hour delivery. That's about on-par with on-
demand courier fees that I've seen in NYC. Presumably the two-hour free
delivery will be phased out once they've reached some metric.

~~~
discodave
If we assume that a) the 1h delivery is break even for them and 2) the 2h
delivery would allow the courier to do a couple of extra deliveries on the
same trip, then I think the per item cost for 2h delivery could be only a
couple of dollars, making it competitive with UPS and thus maybe free for
prime members indefinitely.

------
marban
Are they outsourcing the couriers in this case? The promo video looks like as
if these guys are sourced straight from a Chrome Industries / Rapha
commercial.

------
tapatio
I'm guessing this is not good for
[https://www.instacart.com](https://www.instacart.com)?

------
quackware
Unfortunately only in the 10001 zip code.

~~~
tgcordell
They've just enabled 10001, 10010, 10016, 10017, 10018, 10019, 10020, 10022,
10036

------
zipfle
I find it really weird that on HN, which in general I find to be a pro-
capitalist, let-the-market-sort-it-out kind of place, so many commenters seem
irked at businesses 'being cheap' by offloading waitstaff salaries onto tips.
I'm just a simple country hyperchicken, but isn't this that 'maximizing
shareholder value' stuff I've been hearing so much about?

~~~
olalonde
First, "maximising shareholder value" is essentially a government regulation
which many would argue is not "capitalistic" in the classic sense.

Second, one can both support capitalism as a system and dislike some business
practices.

Third, there is no guarantee that offloading salaries onto tips will result in
maximising shareholder value since it could result in less customers using the
service.

------
Dirlewanger
Can't wait to see how awesome the work environment will be for these couriers!
Probably much like Uber's drivers: under constant pressure to meet a quota (in
this case, probably minimizing the number of missed 1 hour marks), and if
you're injured/hit/cause an accident, it's on you and the employer will be
nowhere to be found.

~~~
philwelch
Ever ordered a pizza? 1 hour delivery doesn't come close to any kind of
realistic safety margin.

~~~
digikata
That depends: is the average distance between Amazon warehouses and recipients
higher than the distance between a neighborhood pizza shop and it's customers?

~~~
philwelch
Well 1 hour delivery leaves at least 15-20 minutes to actually cook the pizza.
I suspect the fact that they're doing this one a few limited parts of
Manhattan indicates that they have some kind of courier depots especially for
this.

------
mrfusion
Wouldn't four hours or anything same day be just as good? Why not save some
costs there?

~~~
smackfu
I think most purchases break down into "I need it now" vs. "I need it in a day
or two." Currently, Amazon can't get the first category, so it's served by
local stores. And four-hour or same-day delivery doesn't really address that
market either.

~~~
function_seven
Actaully, I often need something "before tomorrow". Unless I wait until 9PM to
realize that, a four-hour delivery time would be perfect for me.

------
comrade1
Time to order KY lubricant and the Sports Illustrated swimsuit edition
delivered to a bathroom stall at SFO...

(if you don't remember Kozmo, this was done by a reporter during the last
dotcom boom/bust as a joke)

------
curiously
Meanwhile in Canada...

------
redgrange
nine days ago:
[https://news.ycombinator.com/item?id=8720898](https://news.ycombinator.com/item?id=8720898)

