Amazon is pushing for one-day Prime shipping

Yesterday Amazon managed to beat out Wall Street’s already optimistic expectations with another record quarterly revenue. In amongst its victory laps, the company announced intentions to shift its free two-day Prime shipping to one-day.

The move has been a holy grail for the company, which has already pushed parcel services and its own fulfillment centers to their seeming limits with the promise of a two-day turn around. While some one-day and even two-day options do exist on certain offerings (and in other locales like France, Germany, Netherlands), an across the board push to one day delivery in the States is a massive undertaking.

Amazon CFO Brian Olsavsky notably hedged his bets a bit with his language. Amazon isn’t committing to a timeframe, instead the exec stated that the e-commerce giant is “currently working on evolving” the program. That statement along was enough to ruffle Wall Street, hitting chief competition Target and Walmart right in the stock ticker, leaving them scrambling to respond (an on-going trend over the past decade or so).

Amazon has notably been building out its fulfillment centers. We recently took a trip to the company’s massive JFK8 warehouse in Staten Island, which still has that new factory smell, with plans to employ an eventual 2,250 people in New York City. That space, along with 25 or so others are home to around 100,000 robotic systems, aimed at streamlining the process. That number is expected to increase with recent moves like the company’s acquisition of Canvas.

But in spite, or perhaps because of the presence of robotics systems, there’s are are pertinent questions about how these sorts of moves will impact human employees. The company recently increased minimum wage for full-time employees following a public dressing down from politicians like Vermont Senator Bernie Sanders. Since then, however, the company has used the move to challenge the competition to make changes.

Even so, reports of difficult working environments have persisted.

from Amazon – TechCrunch https://techcrunch.com/2019/04/26/amazon-is-pushing-for-one-day-prime-shipping/

AWS wants a bigger share of Asia following Hong Kong launch

Amazon’s cloud computing unit is making further inroads into Asia after it opened a data center in Hong Kong this week, adding to the seven existing locations where it currently operates across the Asia Pacific and China.

The new entry will likely give the American giant some leg up in its regional battle with Alibaba’s cloud service, which, according to a new Gartner report, was the biggest cloud infrastructure provider in the Asia Pacific last year. But that won’t be the case with all countries, notably China where the cards are often stacked against foreign players.

Amazon Web Services has been operating in China for quite some time, albeit through rough and roundabout routes. A set of cyber laws enacted by Beijing in mid-2017 required foreign companies to store data locally and outsource their hardware parts to Chinese partners. In response, AWS teamed up with two separate local providers based out of Beijing and the hinterland province of Ningxia to run its cloud service while it provides the necessary “technology, guidance and expertise” to the allies. In practice, AWS’s China users are subject to terms and conditions set by its domestic partners.

With two data hubs, AWS managed to carve out a 6 percent share in China’s market for public cloud as an infrastructure service in the first half of 2018, according to research company IDC. Alibaba enjoyed a significant lead with a whopping 43 percent share, exceeding the sum of second to ninth-ranked players.

One main appeal of Alibaba Cloud, as well as many other Chinese offerings, is affordability. “Whether it’s price or service, AWS is at a real disadvantage in China,” Lin Rong, who runs a website called 91Yun that reviews cloud services and runs a forum for cloud computing, told TechCrunch.

AWS isn’t exiting China, but Amazon did sell physical assets to comply with Chinese law

In the meantime, an increasing number of Chinese companies are looking to host their servers in neighboring countries for global deployment as they take their apps, mobile games and other internet services overseas. Hong Kong is one popular hosting destination for export businesses, but even on the opposite end of the border, Alibaba has been a prime choice for many Chinese enterprises.

Just like on the mainland, Alibaba Cloud’s Hong Kong service is cheaper than its international rivals; it also delivers lower latency to mainland users than AWS, Lin observes, thanks to its tie-ups with China’s top three network providers.

At the very least, AWS’s foray into Hong Kong will heighten competition among cloud services targeting locally based companies. There are few places in the world where competition in cloud is as fierce, suggested Keith Yau, founder of Bootdev, a cloud-based platform for running websites.

“Hong Kong now has all the big cloud companies — Azure, AWS and Alibaba Cloud — as well as Google Cloud Platform, which is very unusual for any city in the world,” he told TechCrunch.

Hong Kong as a hub for international trade and financial services, alongside the government’s recent push to attract more tech-focused companies, means a substantial demand for data storing and processing power. Amazon, being “best in tech among all cloud services,” suggested Cyrus Wong, a data scientist at Hong Kong Institute of Vocational Education, will likely win some share away from existing players.

“Hong Kong is globally recognized as a leading financial tech hub and one of the top places where startups build their businesses, so we’ve had many customers asking us for an AWS Region in Hong Kong so they can build their businesses on the world’s leading cloud with the broadest and deepest feature set,” read a statement from Peter DeSantis, vice president of global infrastructure and customer support for AWS.

According to the Gartner report, AWS currently ranks second to Alibaba Cloud across the Asia Pacific. Its share declined 0.2 percent to 11 percent in 2018, while Alibaba Cloud added 4.7 percent to bring its slice to nearly 19.6 percent.

from Amazon – TechCrunch https://techcrunch.com/2019/04/26/aws-hong-kong/

Amazon is prepping a high-fidelity TIDAL competitor

Amazon is prepping a high-fidelity music streaming service for a launch by year-end, according to a report from Music Business Worldwide — a site which also accurately reported Amazon’s recent launch of the free, ad-supported Amazon Music service for Echo device owners. As for the high-fidelity service, the plan is to charge around $15 per month for this “better than CD quality” offering — which could present a direct challenge to TIDAL.

It seems Amazon wants to cover the market both at the low-end and the high, by offering direct competitors to services like Pandora, Spotify, Apple Music, and now, TIDAL.

The company’s investment in music not only allows for new revenue streams through advertising and subscriptions, it also provides a direct connection to Amazon’s smart speakers: its Echo line of devices. For consumers pinching pennies, the ad-supported service streaming over an Echo Dot may be good enough. But those who bought, say, a stereo pair of Echo Plus devices and an Echo Sub, may want a better-quality music subscription, too.

Currently, those audiophiles may have sought out something like TIDAL. The service’s Hi-Fi tier is $19.99 per month for CD-quality streams at 44.1 kHz / 16 bit. TIDAL also offers a Masters quality tier at 96 kHz / 24 bit. Deezer, meanwhile, streams 16-bit FLAC files.

It’s unclear where Amazon’s high-fidelity service will fit in, as the bit rate isn’t known.

However, discussions are still in the early stages, the report notes — only one major record company is on board so far.

If Amazon proceeds to launch this high-fidelity service, it will have price points and feature sets that span the music streaming market from free to paid to premium. That will help the company retain customers who may have otherwise jumped to a competitor for a differentiated offering. As a further incentive, Amazon could also choose to offer deals and discounts to its premium offering to those buying its smart speakers or subscribing to Prime — much as it does today with its $3.99 / month Amazon Music Unlimited plan tied to a single Echo device.

from Amazon – TechCrunch https://techcrunch.com/2019/04/26/amazon-is-prepping-a-high-fidelity-tidal-competitor/

A seat at the table

Short-term profits are a lousy way to build a sustainable community.

There’s always a shortcut, a rule to be bent, a way to make some more money now at the expense of the people around us.

The counterbalance to selfish Ayn-Randian greed is cultural belonging.

“No,” the community says, “we’re not proud of what you did, and you’re not welcome here.”

People like us do things like this.

It’s the community’s role to establish what “things like this” are. If you want to hang out with people like us, that’s the price you have to pay. To avoid the short-term and to invest in us instead.

The community might be wrong. The path of the person making change happen is often lonely, because change is frightening. But too often, the act of taking a shortcut or finding a short-term profit is confused with the actual long-term hard work of making things better.

Fortunately, the community often knows better.

[PS today’s the first priority deadline for the next session of the altMBA.]

       

from Seth Godin's Blog on marketing, tribes and respect https://feeds.feedblitz.com/~/601208116/0/sethsblog~A-seat-at-the-table/

Amazon beats optimistic profit expectations for Q1

Amazon announced today that it has beat Wall Street’s already optimistic Q1 projections. The e-commerce giant’s revenues have slowed a bit, contributing to moderate fluctuations in after-hours trading, but the company greatly benefits by ever-increasing profit margins.

Net income for the quarter hit $3.6 billion, a new record for the company. Much of those inflated margins can be chalked up to online services, including advertising and, most notably, cloud services through AWS.

The earnings report demonstrates just how much the site has diversified its portfolio, with earnings that now include results from Whole Foods, which Amazon absorbed last year. The grocery store chain has seen the impact of multiple rounds of price cuts since becoming a part of Amazon, though growth on that side is slow compared to the company’s cloud offerings.

Jeff Bezos took the opportunity to note the company’s increased investment in education. Amazon’s been pushing to highlight its softer side of late, as it has been the target of negative publicity over working conditions in its fulfillment centers and has since shuttered plans for opening an HQ2 in Queens.

“The son of a working single mom, Leo Jean Baptiste grew up speaking Haitian Creole in a New Jersey home without internet access. He’s also one of our inaugural group of 100 high school seniors to receive a $40,000 Amazon Future Engineer scholarship and Amazon internship,” he said in a statement. “Our passion for invention led us to create Amazon Future Engineer so we could help young people like Leo from underrepresented groups and underserved communities across the country.”

It’s a rosy picture for a company that’s been killing it on earnings, though the company was less bullish when it comes to Q2 as its growth has been slowing. Amazon offered guidance of as much as $1.6 billion below Wall Street’s $4.2 billion expectations. As CNBC notes, that could well point to the company’s intentions of making additional investments going forward.

from Amazon – TechCrunch https://techcrunch.com/2019/04/25/amazon-beats-optimistic-profit-expectations-for-q1/

Amazon Prime’s dominance is spurring new startup opportunities

John (Jiang) Lin Contributor

John Lin is an associate partner at Trinity Ventures supporting investments in developer tools, artificial intelligence and real estate.

More posts by this contributor

• The next frontier in real estate technology

E-commerce is one of the economy’s bright spots; U.S. e-commerce sales have nearly doubled in five years, and now exceed $500 billion. Unsurprisingly, Amazon has swooped in to claim a disproportionate share of the riches, gobbling up nearly 50 percent of the market share, driving competitors out of business and solidifying its position as one of the world’s most valuable companies.

As part of its complete transformation of the e-commerce landscape, Amazon has made two-day shipping the new industry standard — a standard which most would-be competitors can’t meet on their own without either investing millions in infrastructure or partnering with their greatest competitive threat. Fortunately for merchants, some exciting new logistics startups are emerging to help them compete with Amazon.

Amazon’s chokehold

In classic coopetition form, Amazon now enables more than a million merchants to sell through  Amazon Marketplace. It offers these merchants two-day shipping via a cheap flat fee per package — a fee so cheap, in fact, that no shipping provider can come close to matching it. Amazon is doubling down on its advanced fulfillment network by investing $700 million in Rivian, an electric truck company; augmenting its fleet of 50+ delivery planes; and rolling out 20,000 Mercedes-Benz delivery vans.

Two-day delivery is so compelling, often doubling sales, that many merchants are becoming increasingly dependent on Amazon despite the obvious risks of partnering with the juggernaut. This in itself is spurring startups that help merchants thrive on Amazon. Amazon forces those merchants who work with them to compete side-by-side with other brands, including the company’s own private-label collection that it promotes aggressively. Amazon also pressures merchants to provide their lowest prices on Amazon — despite the fact that Amazon takes a significant revenue percentage. Even then, Amazon still might suddenly kick merchants off its platform without prior notice.

Once merchants sell on Amazon, they often find it impossible to diversify to other platforms with higher margins and more control because they become reliant on Amazon’s unbeatable two-day delivery price. This pressure is making merchants increasingly nervous as Amazon squeezes them from all sides. Merchants are desperately seeking solutions to help them get out of Amazon’s chokehold. A new batch of startups is seizing the opportunity to provide just that.

Aggregated delivery routes

Transportation accounts for more than 75 percent of delivery costs. Merchants can save millions by pooling together their shipping, trucking and last-mile delivery costs. Traditionally, this pooling was done by expensive freight brokers on pen and paper. Today, companies like Flexport, which just raised $1 billion, and Convoy, which was just valued at more than $1 billion, can more effectively match shippers and carriers to combine packages and lower costs.

Addicted to convenience, consumers keep demanding that their merchandise arrive ever more quickly.

Last-mile delivery companies like ShipBob, which recently closed a $40 million investment round, are also beginning to offer Amazon-like two-day shipping solutions. Deliv* takes an even more aggressive approach by offering same-day shipping for retailers via its couriers. By combining volume, these startups allow merchants to save more than 20 percent by negotiating for larger bulk discounts with carriers and by optimizing routes.

Distributed warehousing

To deliver within two days, merchants must have access to warehouses located near their customers. While companies like Walmart and Amazon might be able to invest billions in multiple distribution centers located throughout the U.S., smaller merchants and distributors can rely on startups like Flexe and Darkstore to provide on-demand storage in pooled warehouses across the country. Rather than keeping everything in a central warehouse thousands of miles away, merchants can use artificial intelligence to predict consumer demand and ship inventory to nearby distribution centers. These startups will become increasingly important as retailers seek to go beyond two-day shipping and offer one-day and even same-day shipping.

Robotics and automation

Despite the heavy upfront costs, robotics offer a cheaper long-term alternative to manual labor in many distribution centers. RightHand Robotics, which just landed $23 million, uses a robotic arm to help pick and place items at warehouses. Each arm can operate at the same speed as an experienced packer, while working around the clock. Other startups use automation to reduce last-mile delivery costs through a variety of methods, ranging from self-driving cars to delivery drones. Starship Technologies, for instance, is building a fleet of small self-driving robots to deliver locally. Although individual merchants may not purchase robotic arms, they can leverage logistics startups to reduce costs and improve efficiencies via these new automation techniques.

Addicted to convenience, consumers keep demanding that their merchandise arrive ever more quickly. Amazon is king of convenience and is constantly pushing the bar higher — or faster in this case. Merchants are struggling to keep up. Fortunately for them, a new generation of logistics startups are helping them compete. By creating solutions for the logistics infrastructure of the future, these startups are helping merchants stay in the race against Amazon.

* Denotes Trinity portfolio company

from Amazon – TechCrunch https://techcrunch.com/2019/04/25/amazon-primes-dominance-is-spurring-new-startup-opportunities/

On finding something to say

The throughline of the last twenty years of tech has been new ways to speak up and connect.

We’ve built platforms for email, video, writing, short fiction, daily updates, chat, discussion, classes…

But what if you don’t have anything to say?

It’s difficult to find a tech solution for this problem.

It might be that instead of spending more time looking for a louder platform, you could profit from digging in and doing the hard work of figuring out the change you seek to make. If you’re unable to influence one person in a face to face meeting, all the tech in the world isn’t going to help you change a million people.

       

from Seth Godin's Blog on marketing, tribes and respect https://feeds.feedblitz.com/~/601170444/0/sethsblog~On-finding-something-to-say/