The Amazon Fire Phone – what it could mean to the Transportation Industry
June 26, 2014
June 26, 2014
Amazon launched a new mobile phone, the Fire Phone that could be a true “game changer,” not just for mobile communications or retail sales but also for freight transportation. Let me tell you why.
Unlike other cell phone manufacturers, Amazon is looking for e-commerce business, not mass profits from mobile phone sales. That is the raison d’etre for this phone. Like Apple, they have created an entire ecosystem. Unlike Apple, their ecosystem is not based on selling just computer hardware and software such as iTunes, iPads and iPhones. Amazon wants their hundreds of millions of registered users to buy books, consumer electronics, toys, household supplies and toasters from their massive warehouses of products.
Amazon has a huge inventory of data on consumer preferences and purchasing behavior. It can tailor its marketing messages to specific target markets and then cross-sell them on purchasing other lenses for a camera or tennis clothes to go with the purchase of a new tennis racquet. Amazon’s Firefly technology allows the user to point the phone at an object and then be transferred to an Amazon website that will sell you the product. This is a neat trick (e.g. clever software) that will allow impulse buyers to obtain instant gratification.
Last but not least, the purchase of the Amazon Fire phone provides the user with a free one year subscription to the Amazon Prime $99 a year freight delivery service. So as the user sees a product in a magazine or store, the Fire Phone can take you immediately to a website that will sell you the product and suggest others that you may like. With another click on the Fire, the user can then arrange to have the goods delivered to their home or office within two business days. Clearly the Amazon Fire is trying to create a new e-commerce business model. Like every other new business model, it will take some time to gain traction. If, and more likely when it does, it could dramatically change the world of freight transportation.
The Amazon Fire will allow consumers to “point, shop and ship” almost anywhere, any time. The speed and simplicity will appeal to anyone who prefers to look at a photo and shop without going to a mall or even searching online to find an object. Of course, the Fire Phone has a number of other interesting features like 3-D imaging and an enhanced camera so it can compete with other mobile phones.
After reading several reviews over the past couple of days, the phone is being greeted with a fair amount of skepticism. Amazon is not giving the phone away. At a price point of $199 to $299 with a 2 year contract, it is not a bargain when compared other similar phones. A price point of $99 or maybe $149 might possibly help produce greater phone sales. Also, do we really need a Fire Phone to conduct e-commerce? Are we so anxious to make impulse or even planned purchases that we need a “point and buy phone”? Isn’t a laptop or tablet a better device to search and shop? Here are few facts to consider.
Amazon has grown from revenues of $1.6 billion in 1999 to $74 billion in 2013. The company is quickly building warehouses so it can provide same-day delivery in the top 20 markets in the United States. This could allow consumers to make a purchase in the morning and receive delivery of the product in the afternoon. While all this is going on, Amazon continues to expand the range of products that it sells. It also plans to establish its own fleet of trucks. It is clearly positioning itself as “the e-commerce ecosystem.” This vertically integrated ecosystem includes the freight delivery component. Truckers (and retailers), take notice and stay tuned.
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Dan Goodwill, President, Dan Goodwill & Associates Inc. has over 30 years of experience in the logistics and transportation industries in both Canada and the United States. Dan has held executive level positions in the industry including President of Yellow Transportation’s Canada division, President of Clarke Logistics (Canada’s largest Intermodal Marketing Company), General Manager of the Railfast division of TNT and Vice President, Sales & Marketing, TNT Overland Express.
Goodwill is currently a consultant to manufacturers and distributors, helping them improve their transportation processes and save millions of dollars in freight spend. Mr. Goodwill also provides consulting services to transportation and logistics organizations to help them improve their profitability. All posts by Dan Goodwill