Amazon Continues to Experiment with the Psychology of Delivery
Amazon (AMZN) is known to like toying with the psychology of the delivery process, and it recently spent $500 million acquiring another e-commerce site that does the same thing. If Amazon can manage to hold off rivals like Wal-Mart (WMT), it may be by innovating with fulfillment strategies.
That $500 million Amazon spent was for a relatively young company called Quidsi Inc, which operates Soap.com, Diapers.com and BeautyBar.com. (They are what they sound like: soap, diapers and cosmetics sold online). But there are plenty of other single-purpose online stores out there -- in fact, there are online stores that exist for almost any single product you can imagine: just cereal, just paint; just light bulbs; just napkins. So what makes Soap.com and Diapers.com an Amazon acquisition?
It might be the way Quidsi thinks around the delivery process that got it noticed. With Soap.com, the company is testing out same-day delivery teams in New York, and presumably other markets and products will follow. Amazon, it seems, is willing to buy companies that specialize in fulfillment.
Amazon has always dabbled in customized delivery
Earlier this year Amazon introduced AmazonTote, a service that delivers your stuff whenever the Amazon delivery van (which sells groceries in some markets) is in the neighborhood. With the Quidsi acquisition, Amazon's products now run the gamut: there are customized fulfillment options for products you want right now; stuff you want sooner than later; and stuff that you don't mind waiting for.
PetFlow.com, a pet food delivery company, is another company that is experimenting with delivery to make their niche business work. They've styled their business as a sort of subscription service that lets you get your pet food auto-delivered to your house at a pre-set schedule. While PetFlow is still new, its fulfillment mechanism might be the key should it succeed.
Electronic retailers would probably say that their core competencies are things like customer service, price, ease of use, or selection. But delivery might be another leg on the stool. Take a look at the leadership for Soap.com, and its list of investors, which include Accel Partners, Bessemer Venture Partners, and Nicholas Negroponte, and you'll see that this reality is not lost on high-end VC funds. If that is the case, we may see more customized delivery systems coming our way.
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