Benedict Evan's most recent blog post, called "Amazon as experiment," draws some interesting parallels between what Amazon is doing today (and experimenting with) and the beginning of mass retail, namely the invention of the department store. He also talks about some of the shortcomings of Amazon's model, which isn't at all focused on (or good at) things such as "pleasure" and product discovery. Here are a couple of excerpts:

On the other hand, it’s interesting that Amazon seems to be doing as much experimentation as possible around the logistics model—from stores to drones to warehouse robots of every kind—but much less around the buying experience, other than small-scale tests of the Four-Star stores. After all, historically, department stores were about pleasure as much as they were about convenience or price. They changed what it meant to "go shopping" and helped turn retail into a leisure activity.

This has always been the gap in the Amazon model. It’s ever more efficient at finding what you already know you want and shipping it to you, but bad at suggesting things you don’t already know about, and terrible whenever a product needs something specific—just try finding children’s shoes by size.

This is probably inherent in the model. For Amazon to scale indefinitely to unlimited kinds of products, it needs to have more or less the same commodity logistics model for all of them. That’s the line it’s never been willing to cross. Amazon doesn’t do "unscalable." And yet, while we now know there is nothing that people won’t happily buy online, not everything will fit that commodity model. So maybe that’s the real test of Amazon’s pride: can it work out how to let us shop, rather than just buy?

This is an excellent talk by NYU professor Scott Galloway about Amazon, online grocery, and many other aspects of the retail landscape. The bits about Amazon’s scale and reach are fascinating. There is about 30 minutes of him speaking quickly and then another 15 minutes of Q&A. If you can’t see it below, click here.

[youtube https://www.youtube.com/watch?v=_HyiY_m_YxI&w=560&h=315]

This piece in the New Yorker about how e-commerce, and in particular JD.com, is transforming rural China is worth a read.

In typical New Yorker fashion, it’s a good long-form read, but one that you can also listen to if that’s your thing.

What’s immediately fascinating are how important trust is to JD’s rural expansion strategy and how locals from these rural communities are used to penetrate the social networks.

Today, Xia oversees deliveries to more than two hundred villages around the Wuling Mountains, including his birthplace. But, in line with JD’s growth strategy, an equally important aspect of Xia’s job is to be a promoter for the company, getting the word out about its services. His income depends in part on the number of orders that come from his region. Across China, JD has made a policy of recruiting local representatives who can exploit the thick social ties of traditional communities to drum up business.

This is important because:

“Chinese people don’t easily believe the good will of strangers,” Liu told me. “Why do you think Chinese fight tooth and nail to get on the bus and subway?” He shook his head and laughed. “It doesn’t matter that it’s less efficient or unnecessary. It’s a complete reflex for them, because it’s what they’ve been taught since they were young.”

When you have some time, here is the full article. 

According to the New Yorker, JD.com is the third largest tech company in the world in terms of revenue. They also have the largest drone delivery platform in the world.

Benedict Evan's most recent blog post, called "Amazon as experiment," draws some interesting parallels between what Amazon is doing today (and experimenting with) and the beginning of mass retail, namely the invention of the department store. He also talks about some of the shortcomings of Amazon's model, which isn't at all focused on (or good at) things such as "pleasure" and product discovery. Here are a couple of excerpts:

On the other hand, it’s interesting that Amazon seems to be doing as much experimentation as possible around the logistics model—from stores to drones to warehouse robots of every kind—but much less around the buying experience, other than small-scale tests of the Four-Star stores. After all, historically, department stores were about pleasure as much as they were about convenience or price. They changed what it meant to "go shopping" and helped turn retail into a leisure activity.

This has always been the gap in the Amazon model. It’s ever more efficient at finding what you already know you want and shipping it to you, but bad at suggesting things you don’t already know about, and terrible whenever a product needs something specific—just try finding children’s shoes by size.

This is probably inherent in the model. For Amazon to scale indefinitely to unlimited kinds of products, it needs to have more or less the same commodity logistics model for all of them. That’s the line it’s never been willing to cross. Amazon doesn’t do "unscalable." And yet, while we now know there is nothing that people won’t happily buy online, not everything will fit that commodity model. So maybe that’s the real test of Amazon’s pride: can it work out how to let us shop, rather than just buy?

This is an excellent talk by NYU professor Scott Galloway about Amazon, online grocery, and many other aspects of the retail landscape. The bits about Amazon’s scale and reach are fascinating. There is about 30 minutes of him speaking quickly and then another 15 minutes of Q&A. If you can’t see it below, click here.

[youtube https://www.youtube.com/watch?v=_HyiY_m_YxI&w=560&h=315]

This piece in the New Yorker about how e-commerce, and in particular JD.com, is transforming rural China is worth a read.

In typical New Yorker fashion, it’s a good long-form read, but one that you can also listen to if that’s your thing.

What’s immediately fascinating are how important trust is to JD’s rural expansion strategy and how locals from these rural communities are used to penetrate the social networks.

Today, Xia oversees deliveries to more than two hundred villages around the Wuling Mountains, including his birthplace. But, in line with JD’s growth strategy, an equally important aspect of Xia’s job is to be a promoter for the company, getting the word out about its services. His income depends in part on the number of orders that come from his region. Across China, JD has made a policy of recruiting local representatives who can exploit the thick social ties of traditional communities to drum up business.

This is important because:

“Chinese people don’t easily believe the good will of strangers,” Liu told me. “Why do you think Chinese fight tooth and nail to get on the bus and subway?” He shook his head and laughed. “It doesn’t matter that it’s less efficient or unnecessary. It’s a complete reflex for them, because it’s what they’ve been taught since they were young.”

When you have some time, here is the full article. 

According to the New Yorker, JD.com is the third largest tech company in the world in terms of revenue. They also have the largest drone delivery platform in the world.