Higher Rock Education - Economics Blog

Wednesday, February 15, 2017
When I think of advances in technology, I think ways to manufacture items more efficiently. I associate technological advances with production rather than marketing. Our British contributor has written a blog discussing how Amazon has used its technology to further its marketing.

When most people find themselves low on milk or eggs, the obvious solution is a quick trip to a nearby shop – few would think of turning to Amazon to help stock their fridge or replenish their supply of cereal. However, with Amazon's new "Prime Now" service promising delivery of certain items within just a couple of hours, it's actually not at all impractical to think of ordering breakfast from the well-known internet giant – in fact, one British magazine has already done so, and reported very favourably on the experience.

There are, of course, a few limitations. Prime Now is currently available only in an extremely limited selection of areas, and offers only a carefully-curated selection of items. There are, of course, plans to expand the service – but for the majority of readers it will be some time before they're able to log on and place an order.

The question you might be pondering, at the moment, is why? Amazon is not a supermarket, and the infrastructure needed to provide hourly delivery is enormous. The vast majority of its customers will surely be satisfied with the next-day delivery that comes as part of Amazon Prime. Is their bid to deliver certain essential items within the hour anything more than a gimmick? Are customers really crying out to get their items that quickly?

The answer is no; not right now. But they will be sooner or later.

Prime Now is not the first experiment in instant online delivery. Customers all over the UK have long been able to order pizzas online (sometimes even at the touch of a button), and Deliveroo promises restaurant food within the hour in any of the cities where it operates. Uber brings you taxis on demand from your smartphone, and actual supermarkets like Tesco are constantly offering swifter and swifter delivery. More and more it is becoming possible to order online, and have your hands on a physical object or service within hours rather than days.

As new technology becomes more prevalent (Amazon has already hinted at drone delivery.) hourly delivery is going to start looking less and less like a novelty, and more and more like something most consumers will be able to expect. Not only that, but having the infrastructure for hourly delivery in place will allow Amazon to take advantage of other future technological developments. Already tools exist which allow you to automate the management of your home . Low on eggs? The fridge of the future will know, and will be quite happy to order in some more without your supervision. (Read BBC's article by Richard Westcott on July 26,2016 for a discussion on the challenges of delivering goods with drones.)

Amazon's bid for one-hour delivery may seem like a waste of money to an uneducated eye, but business ideas that are ahead of their time often do. By keeping one eye on developing technology, Amazon has ensured that they are ahead of the game, and before long even those who laughed at the idea of one-hour delivery will be ordering breakfast off the internet.

Can you think of any other developing technologies that companies have used to market their services? How could different businesses use, for example, drones, 3D printers, or the internet of things?


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