Amazon announced this week that it would begin making Sunday deliveries. The roll out begins this weekend in New York and LA. In 2011 it will cover much of the U.S., including Dallas, Houston, New Orleans and Phoenix. In an ironic twist of fate, the failing U.S. Postal Service will handle deliveries.
Here are the details: The service will be available to Amazon Prime members who pay $79 per year for expedited, delivery as well as video services. That means that Prime members will be able to place an order on Friday and should be able to have it in hand on Sunday. The service is also available to non-Prime purchasers who spend more than $35 on purchases (recently up from $25) for free 5-8 day delivery.
Where’s the value in all of this for Amazon? It looks like they’re giving away stuff for free. It’s likely a case of CEO and Founder Jeff Bezos looking at the long term. Right now online retail accounts for just 10 percent of all retail in the U.S. Bezos is trying to make significant inroads there, making Amazon the future retail go-to for all of America’s (and the world’s) needs. Toward that end, Amazon has been building more distribution centers and even experimenting with same day delivery. It’s all about building for the future.
When you break it down, it’s probably not even costing Amazon all that much. Amazon is presumably banking on more purchasers becoming Prime members and thus forking over that $79 annuity. Once purchasers do join, it’s quite likely that only a small number of purchasers will actually require Sunday delivery. Plus Amazon is scoring big on PR for this move. Not only are accounts stressing customer service but they’re also looking at it in the context of helping out the USPS. On the latter point, the reality is that it’s not likely to provide much in the way of sustenance to the postal service which at this point is just hemorrhaging cash.
Undoubtedly there are many out there who see this as a foolhardy exploit by Jeff Bezos. Some look at the extraordinary time horizon that they project for etailing to come to a par with retailing. Jeff Bezos, however, doesn’t go in for half-baked initiatives, at least most of the time. He usually wins and makes money in the process (apart from his founding of Amazon some may recall that he personally was an early Google investor). For more on Bezos and Amazon, I heartily recommend Brad Stone’s new book, “Jeff Bezos and the Age of Amazon.”
At Capacity LLC our pursuit of packaging perfection knows no bounds. When we first moved into our New Jersey location in 1999 we dropped grocery items off of the roof to experiment with packaging techniques. Doritos and Tide detergent were early subjects. Now, in a nostalgic nod to those good old days, we are once again dropping things off of the roof. Only this time, we’ve raised the bar as we try to avoid scrambling eggs. Join us, won’t you?
Dateline: Milwaukee, Wisconsin. This summer found us in the land of cheese, brats and beer. Capacity was there to acquire order processing technology to help cost-effectively process large pick-and-pack distributions. Capacity ships weekly replenishment orders to thousands of WalMart stores on behalf of its Client under what is known as a DSDC (“Direct Store Delivery Consolidation”) program, and invested in this technology to ensure that the short processing window and tight financial constraints were met.
A pick-to-light system at work.
Known in the industry as a “Put-to-Light” or “Pack-to-Light” system, this technology allows Capacity to pick bulk goods from reserve rack locations for a large group of orders and use lighted LED modules to quickly and accurately fill orders for individual stores. Capacity purchased the system from Lightning Pick Technologies of Germantown, Wisconsin. Before shipping our configured system to California, Lightning Pick hosted a “conference room pilot” for our team to test and finalize functionality. Let’s go!
The system installed in our LA warehouse
Here’s a video about how our new system works.
Lightning Pick – Pick to Light
We played ball in Milwaukee. OK, we watched.
Rohan Bhobe, master developer at NJ HQ, worked together with colleague Sasmitha Kalathur to build and test the data interface in a remarkably short period of time. He flew in from Newark for the conference room pilot. The rest of our team flew in from around the country to take in a (surprise!) baseball game at Milwaukee’s stunning Miller Park. OK, so it was the last-place Brewers taking on the last-place Padres, but consider the following:
Tickets for the seats 12 rows behind home plate were just $33 each!
Two colleagues from Lightning Pick joined us for the game, giving us the chance to meet in person before the official meeting.
Rohan had never been to a sports stadium before. That’s right folks, not a soccer stadium in Germany where he attended university, or a cricket match in India where he grew up. First time for everything in life!
Years ago, Scott and Jeff attended a playoff game in Anaheim together, with Scott’s Angels taking on Jeff’s Yankees. Both teams have since crumbled miserably, but it was time for another game.
Five types of 10 foot tall sausages ran an exciting foot race around the field during a mid-inning break, with bratwurst coming in first and chorizo finishing last.
During the seventh inning stretch, two wholesome-looking couples danced the polka ON TOP OF BOTH DUGOUTS to strains of the Beer Barrel Polka (“Roll out the barrel, roll out the barrel of fun. Roll out the barrel, we’ve got the blues on the run…”)
Ever been to a sausage race?
Missing from the scene were our previously-wholesome Wisconsin native friends (long since corrupted by life in the Big City): Bob DeBaker from Becca Cosmetics and Caryn Blanc from transportation partner Triangle.
By the way, Capacity’s connection to Wisconsin goes back a ways. Our CFO Arlen Fish studied and sampled the local brews (in that order, we think) at UW-Madison.
Never wanting to let a client down, we took it on, but it was then further compressed into about half the time originally indicated by delays in inbound product. We took it in stride, and when CEO Jeff Kaiden mentioned it would be helpful if the office staff worked the balance of the day (and the next day) at the C2 facility, all hands quickly jumped on deck.
Folks from Finance, led by self-proclaimed champion picker and CFO Arlen Fish, clearly made a huge dent in this major job, as well as folks from Client Service, IT and facilities management. It was the first time in several years we’ve had to mobilize a lot of the office team out on the floor, and we had a great time working side-by-side. Some of the warehouse associates clearly thought it a bit unusual to be teamed with the c-level team, but they handled it in style and we quickly moved five full truckloads out the door in a span of about 5 days, all while servicing existing customers.
Our New Jersey and LA campuses are protected by state of the art detection systems. We even have special, secured and patrolled areas for products like DVD’s and video games. Once a year, however, we feel the need to call in the reinforcements, Ghost Busters.