The internet's go-to service for everything they need released news of an innovative method of delivery the day before Cyber Monday. A strategic move on Amazon's part, they released a promotional video of a currently-imaginary service that would deliver Amazon packages by air. Though Amazon's chief Jeff Bezos says that there are many hurdles to jump before this service becomes a reality, the public seems to be excited. So excited, in fact, that Amazon reportedly got $3 million of free internet marketing done through the virality of the campaign. Watch the Daily Brown Bag to learn about Amazon's Prime Air campaign, what they anticipate for the program, and how much of a possibility it really is.
Hello, and welcome to the Daily Brown Bag. Today we’re going to be talking about Amazon’s Prime Air, the recent announcement they made. I’m Chad Hill, and I’m joined by Adam Stetzer.
Yeah, good morning, Chad. Welcome to the Brown Bag! This is kind of a cool topic. Amazon announced in the last week or so via 60 Minutes coverage and other coverage that they’ve been working on a robotic delivery process through the air, using a modified robot helicopter with eight propellers. This is a very futuristic announcement, but they said they’ve come pretty far with working on the technology that can bring small packages with relatively small delivery radiuses, but can completely automate dropping a package into your backyard or on your front porch via air delivery. It sounds like something out of The Jetsons, sort of futuristic, but they’re pretty serious about it. Jeff Bezos gave this great interview, and we wanted to chat about it today because it’s a fun topic.
I saw a comedian talking about this the other day, and the question was, “Can you think of a reason why this is a bad idea?” and he said, “Yeah, I can think of eight razor sharp reasons that are high RPM on why this is a bad idea!” But, let’s get into this. The reality is that we think we’re probably really years away from seeing anything like this in the United States for a whole bunch of reasons. Technologically, there is still quite a bit of safety work to be done, but also, on the regulation side, the FAA really isn’t going to look at this, I think, until 2015, so there’s really just no chance of that, and Jeff Bezos acknowledged that. But, there are other companies who are in this game. UPS has reportedly been testing some sort of unmanned delivery drone process. FedEx’s founder, Fred Smith, has been talking about this for years, and apparently the United States is not leading the way here. The Australian company Zookal announced that they might be doing deliveries in Sydney as early as March 2014. So, this is interesting, Chad. What do we make of all this?
Well, I think first of all that what we’re talking about is interesting, and the story itself has gotten massive coverage. We saw that this was mentioned 600,000 times just essentially the day after it was announced on 60 Minutes. There already had been 1200 articles by mid-day on Monday, going back a couple weeks, and there were 4 million YouTube videos. Of course, since then it’s spawned other parodies. Groupon had a really funny viral YouTube video they did where they said they were going to be introducing package delivery via the catapult. It’s just a funny interesting thing! But, I think the serious side of it is that people at Amazon look to figure things out and continue to grow, they know ultimately that one of their biggest competitors is the local retailer. I’m sure the retailers are just quaking in their boots at this point, because this really is one of their final competitive differentiators, that when you need something right now, you can drive down the street and get it, whereas Amazon, still with all their fast delivery and Prime delivery takes a day or two. It is very interesting.
Now, a part of this is that I’m sure Amazon doesn’t want to be left out in the cold. You said, Adam, that UPS is already prototyping this and that there’s already some stuff going on in Australia, but there’s also another side of this, which is that some people will say that Amazon does take a lot of heat. There was a recent biography of Amazon talking about Bezos that kind of casts him in a somewhat negative light. People really question whether Amazon is a good thing. If they do gain 100% or close to it, if they have 68% of retail in the U.S. as Google does in search, what does that mean for us? It’s good for a while, but when they reach that, and there are no more retailers, what do we do? So, it’s an interesting story. It definitely tries to cast Amazon as an innovator and as something other than this massive retail player that’s looking to continue to grow its share of the market. But, who knows? I’m with you, Adam. Those eight blades whizzing overhead, dropping packages out of the sky-- I don’t know!-- seems a little dangerous to me.
There are a lot of interesting points there, and I did watch the 60 Minutes interview. They did ask Bezos, point blank, “What do you say to the critics who charge that Amazon has put the Ma and Pa bookstore out of business?” He had a pretty polished answer. He said, “Amazon did not put them out of business. The internet did. It’s a disruptive technology, and if I didn’t do it, and our company didn’t do it, someone else would.” So, I do think that there is an interesting counter-argument there. It’s also notable, and I saw on the news last night, that Google bought another robotics company, this one a fairly advanced one out of Boston. So, they’re working this angle as well around automation, drones, robotics, and how that can be integrated into life, and I’m sure the way they do things would be advertisment driven.
So, I think there’s no doubt that technology is going to continue to advance. Robotics has always brought us greater efficiencies, if you go back to the revolution in the car industry or back even further to computers and what they’ve done, and now the internet and interconnectedness of computers. I mean, this is not going to stop, so while this sounds sort of far-fetched and Jetson-esque, I do think things are going to move in this direction, and I think that we should expect to see innovation from the forward-looking companies which will hopefully eventually be accepted and open new chapters in what products are available. So, I guess to are marketers, we should say that you should be ready to expect technology to continue to move. But, that’s at least my perspective.
We’d like to hear yours. Share your comments. How would you feel if a robotic helicopter was dropping books on your front porch? Is that something you’d welcome, or is that just the sign of the apocalypse? We’d like to hear that in the comments, and that’s our Brown Bag for today. Subscribe to our YouTube channel to get updates on our Daily Brown Bag series.