By David Dorf-Oracle on Dec 01, 2013
Now I've seen it all. Its already amazing that Amazon expects 300 items per second to be ordered from them on Cyber Monday, many of which will be delivered to Prime customers in two days via their 96 strategically placed fulfillment centers. But now they are experimenting with 30 minute delivery. You can't drive across town in 30 minutes let alone pick and pack and order, so how do they plan to do it? They hope that within a few years, they will be able to deliver small packages via flying drones, more specifically, octocopters.
Jeff Bezos always maintained that Amazon is more a technology company than a retailer. He takes great pride in pushing technology for the benefit of customers, with examples such as product recommendations, Amazon Web Services, and the Kindle reader. Their Lab126 (comes from "A to Z"), famous for the Kindle e-reader, is a hotbed of innovation in the valley.
So I wasn't too surprised when Bezos said they were hoping to deliver packages using drones, but I was floored by the maturity of their demonstration. Small packages go down conveyer belts to awaiting drones that whisk the items away to GPS coordinates. Now there are tons of reasons this won't work today, no the least of which is FAA doesn't allow it, but the prototype shows the technology is only a few years away.
Each of the seven generations of fulfillment centers continues to improve, making it really hard for any competition to catch up. This need to always be investing in the next thing is why Amazon isn't profitable. They continue to take the long view, looking to build competitive moats now in exchange for future profits. And their diversification into book publishing, Web Services, video streaming (including original content), grocery, fashion, tablets, etc. allows them to constantly expand their customer base.
I wonder what's next.
If you'd like to see more, checkout the CBS 60 Minutes Overtime video.