Amazon Seeks to Live Up to Its Namesake (River)
SIMSON GARFINKLE
c.1998 The Boston Globe
Friday is the biggest shopping day of the year in the physical world,
and indications are good that it's going to be a record-breaking shopping day
in cyberspace as well. That's because the combination of easy-to-use Web
sites, incredible selection, and overnight delivery is turning on-line
shopping from a novelty into a necessity for more and more consumers.
Consider me. I'm a book junky. Last year at this time I had spent
$1,491 on books, of which $327 went to Amazon.com, probably the Internet's
most successful on-line merchant. This year the amount that I've spent on
books has dropped to $1,059, but $864 went to Amazon purchases. That trend is
great for Seattle-based Amazon, but lousy for local booksellers.
Although I still love walking through a brick-and-mortar bookstore,
for some reason these trips are growing less productive. Indeed, one thing
I've discovered myself doing is visiting a physical store, then going on line
to order the same book.
Why purchase a book over the Web from Amazon, when you can buy it
just as easily in Harvard Square? One reason is price. I find Amazon
consistently has lower prices than my local bookstores. And even though I do
have to pay a shipping ($3 per shipment plus 95 cents per item) fee, I don't
have to pay sales tax. While it's true that I don't get the book for a day or
two, usually the delay is no big deal.
But the biggest advantage to shopping on line isn't price; it's
selection. Last year I had the pleasure of meeting Jeff Bezos, Amazon's
brilliant president and founder. He told me people are always asking him why
he decided to name his Web site after those one-breasted huntresses of Greek
mythology. He didn't. Amazon, he said, is named after the Amazon River, the
largest, most powerful river of the world. His goal was to be the Amazon of
the book selling world. And he's done it.
Case in point: A few weeks ago, I wanted to get my 1999 FoxTrot
16-month weekly planner. No local bookstore had it in stock, so I clicked to
Amazon on the Web. Less than a week later, I had the calendar. But the company
didn't just send the book to me; it also scanned the cover and put it on its
Web site, building out their database in the process.
Indeed, if you look beneath the covers, there is something else
happening with on-line merchandising that's being generally overlooked. Like
many things on the Web, Amazon's size is part virtual. It doesn't really stock
every book. Instead, it has extremely close relationships with book
distributors and publishers around the world. Amazon shelves have only the
most popular books that customers purchase; order a less popular book, and
Amazon requests it from its distributor in its next shipment, unpacks a big
box in Seattle when the books arrive, packs your book into a box destined for
you, and sends the package on its merry way. Amazon is really a huge trans-
shipping point, and the company's programmers have spent an incredible amount
of effort trying to tune this process to be as efficient as possible.
Order a book from Amazon, and you'll discover that your invoice is
covered with barcodes. After each book title is a little code, like (2-2-6),
which describes the book's exact location in the warehouse. The invoice serves
double-task as a pick list that tells Amazon's warehouse workers were to pick
up each book. Books in the warehouse are not organized alphabetically or by
Dewey Decimal; they're arranged so that orders can be filled in the shortest
amount of time. Running the whole operation is Amazon's extremely
sophisticated order processing system, which combines aspects of ordering
books, managing the warehouse, fulfilling customer orders, and, of course,
running the Web site.
Amazon isn't really a bookseller; it's essentially a big software
development firm. The company currently has 60 job openings in software
development and systems management. It has just two openings in business
development, five in marketing, five in merchandising. This is one reason that
it's so easy for the company to move into other markets, like CDs, DVDs, and
software. The next logical step for Amazon is to eliminate UPS and Federal
Express entirely and sell intellectual property on line.
Amazon's software has two primary goals: improving the shopping
experience, and cutting operations costs as tightly as possible. Ease-of-use,
selection, and customer satisfaction are important issues for on-line shopping
--- far more important than they are with stores in the physical world. That's
because in the physical world, there is an important tangible advantage that
blesses some stores at the expense of others: location. If I live next to a
shoddy bookstore, I'll still check it for a best seller or a travel book,
simply because it's easier than going across town to another store. But on the
Internet, it's just as easy to shop the best. For this reason, the Internet
may represent a fundamentally new twist in shopping: the emergence of winner-
take-all retailers.
(Indeed, there are other bookstores on the Web, such as
barnesandnoble.com and www.books.com, but I don't enjoy using them as much.
Barnes and Noble didn't have FoxTrot 1999 calendar.)
Five or 10 years from now, shopping on the day after Thanksgiving
might be a very different experience. Buying books, CDs, or software at a
store might be a thing of the past. Instead, Mom and Dad might just gather
around a computer screen and pick out their gifts. Or, in another twist, we
might still find ourselves going to brick-and-mortar bookstores where we will
look at the books, enjoy a coffee, and perhaps pick up a little toy. But
instead of walking home with the books, we'll just scan their barcodes, and
then wait to have them delivered a few days later by UPS.
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(The Boston Globe web site is at globe.com )
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