In a hangar somewhere in the U.S. sits a Boeing 767-300 air cargo plane with the words Prime Air emblazoned on the side and the Amazon smile on its tail.
This aircraft is one of a fleet of some 40 cargo aircraft that Amazon has leased from Atlas Air and ATSG to help the Web commerce giant deliver packages to Amazon Prime members. This move will help the retail giant cut delivery costs, but it will also serve to deliver something perhaps more important—dominance.
Amazon is at a critical point in its growth and in its competition with other merchants, both online and physical. The company needs to nail down its dominant position in some specific areas before competitors can get up to speed. Most of all it can’t allow brick and mortar competitors, notably Walmart from making an online comeback.
But there are more companies than just Walmart in Amazon’s sights. This is why struggling Sears has suddenly announced a new round of door-buster specials, complete with free shipping. J.C, Penny is doing the same. For that matter so is another vulnerable merchant with a growing ecommerce business, Costco. All of them have announced sales that coincide with Amazon’s Prime Day, which kicks off at 9 p.m. EDT.
The quest for dominance appears in other areas as well. Amazon’s Echo devices, which include its Alexa virtual assistant, are by far the top selling voice control devices on the market today. But Google has released its Google Home, which operates much like Amazon’s Echo devices and now Apple has announced that it will release its HomePod, which include will the Siri virtual assistant.
Right now, Amazon has the opportunity to position the Echo as a de facto standard, and essentially shut the door of opportunity on Apple, Samsung and the other companies who are reportedly working on virtual home assistants. In Amazon’s case, the result is becoming apparent as Amazon gathers an array of apps, called “Skills” for Alexa and builds an ecosystem of apps, hardware and devices.
Amazon’s capabilities for those devices already exceed anything that Google can do with its Home device. We don’t know what the Apple HomePod full capabilities will be, but there no doubt that Apple’s engineers are watching Amazon’s efforts closely knowing that they have to provide something reasonably equivalent if the HomePod is going to be at all relevant.
One advantage that Apple has with its HomePod is that Apple has a platform that may be able to network with its iOS devices, meaning that you can expect some sort of interoperability between iPhones, iPads and the HomePod.
But the release date for the HomePod is several months away. Will Amazon find a way to pre-empt Apple’s plans before the December delivery date?
Admittedly, Amazon is seeking dominance for the Echo devices in a fairly narrow area, but it’s a good indication of what the company has in mind for ecommerce in general. After all, those Prime Air planes are part of Amazon’s effort to sell products more cheaply and to deliver them more quickly than anyone else.
Amazon’s goal in ecommerce is to be able to deliver those products to buyers more quickly than they get them if they went to the store themselves. Amazon Prime Now is getting close to that goal already, at least for customers in some areas of the U.S. Likewise Amazon’s grocery delivery business is trying to make it faster and easier to buy food than you could on your own.
When I’ve tried Amazon’s grocery delivery, I was able to buy a selection of things I’d forgotten when I went to the grocery store a few days before and have them delivered in less than two hours. Other stores, including a number of grocery chains, are trying to compete by providing grocery pick-up at their stores once you’ve ordered online, and Walmart is trying to compete with online ordering at a discount.
But Amazon is trying to eliminate the trip to the store completely. As nice as it is to be able to order milk and bread and then have it delivered to your car when you get to the store, it’s a lot nicer to have someone else deliver it right to your door. Right now, this is the one thing that Amazon’s competitors have failed to grasp, that it’s about more than just lower prices, it’s about having what you want cheaply and immediately.
And this is where Amazon’s parallel efforts come together. Amazon is selling its flagship Echo at half price, or $89.99. Google, in an effort to compete with Prime Day, has dropped the price on its Google Home to $99. Amazon has also dropped the price on its Echo Dot, which is the top selling voice controlled device on the market, by $15.
And that’s the other part of the equation. Each of those Amazon Echo devices is also a personal ordering terminal that connects directly to Amazon. Those devices also provide access to Amazon’s Prime Music collection and to a variety of other services. All of this is direct competition with Apple Music.
I don’t think that Amazon’s competitors have realized exactly what they’re facing. After all, it’s not really about the products that Amazon sells, it’s about immediate wish-fulfillment delivered with a simple spoken request. Even Walmart can’t deliver that.