Archive for Online Shopping

Amazon Is Leaving The Door Open

Posted in Opinions You Would Agree With If You Weren't An Idiot with tags , , on November 11, 2015 by Genius

There was a good bit of discussion on Hacker News about my last post. I feel like a lot of it missed the point.

The main point was that Amazon has left the door open for a competitor to emerge by bad UI, high prices, and possibly a sucky return experience.

A lot of people argued that Amazon saves them time over going to the store and it’s worth it to them. But that’s not really arguing in favor of Amazon, it’s arguing in favor of online shopping in general. If some other online store saved you the same amount of time, but did so at a lower cost and with a better UI (which would save you even more time) and a better return process (which would save you still more time and maybe money) you’d probably switch. The commenters don’t seem to love Amazon so much as hate Wal-Mart, which is an understandable misattribution. 

Many people mentioned Prime, which, like I said, I have had since the beginning. But Prime really isn’t much for shopping these days. It only really applies to orders below the $35 free shipping threshold, everything above that was going to ship for free anyway. People in my area (and, I’d bet, most of the country, given their impressive distribution) without Prime basically get their free shipping items in the same 2 days I do. It’s only useful on cheap things, which is exactly where Amazon is over-priced in the first place.

Go to Newegg and order something. You know what happens? You’ll get it shipped for free and receive it in 2-3 days. There’s no Prime, they just ship stuff quickly and for free. Same with Jet. Same with a number of merchants.

It sounds like some people live in magical places which are somehow 30 minutes away from the nearest big box store but where the UPS store is next door to them, but it doesn’t matter because the guy just comes and takes the item from their door step, packages it, returns it, then places a crisp $20 under their pillow. Good for you. Most of us live somewhere else. And regardless, if they do that for Amazon, they’ll do that for a sufficiently large competitor, so it isn’t a long-term competitive advantage and again you’re arguing in favor of online shopping in general, not Amazon in specific.

Nonetheless, returns are the least of my gripes and were half tongue-in-cheek. I save some time shopping online and I spend less time than that returning things, so it’s a net win in the time and hassle department. And I’m sure it’s neither a big enough problem, nor an easy enough one to solve, that it’s what I would focus on if I were trying to beat Amazon.

What could be a big problem for them, if anyone takes them on, are high prices and a UI that at times seems almost designed to not sell you what you want. Quidsi (Diapers.com, etc.) built a remarkable business by at least solving the UI problem, though Amazon eventually just bought them for a large amount of money. Jet.com (which has former Quidsi execs on its founding team) is taking them on in both regards. Alibaba is planning to do so as well. I am sure others can’t be far behind.

Will any of the particular companies trying this right now succeed? I don’t know. But I think there’s a market opportunity. It’s very similar, I think, to when people thought Yahoo had search locked up in the 1990’s. I don’t know if Amazon’s head is in the game enough to fix it before it’s too late. They might be too focused on making bad Spotify competitors. Time will tell.

What I do know is that as Wal-Mart ascended and started vanquishing their competition, they didn’t raise their prices. In fact, they used their incredible logistics to lower them and kept growing. I see Amazon doing the opposite and I think it’s a big mistake.