Physical stores have one major advantage over Amazon (NASDAQ:AMZN). They can put goods into customer's hands immediately.
The online retailer has been working for years to lessen that advantage and improve shipping times. The company has done everything from making free, two-day delivery part of its $99 Prime membership package to offering Sunday service in some markets. Amazon has also built out a network of local warehouses across the United States which puts its merchandise physically closer to customers. In limited markets, the one-time bookseller piggybacks non-food items with same-day grocery delivery, and in some cases the retailer uses predictive software in its warehouses to tell it what customers will be purchasing before they make the decision to buy.
It's a constant effort to get goods out quicker that has Amazon pushing boundaries, attempting to create new technologies, and finding clever uses for old ones. Short of inventing a teleportation device or putting a commercial 3D printer in every home, the online retailer will still need to deliver, but it's doing everything in its power to make that a faster, less painful process for its customers.
When Amazon first started testing drones as a way to offer same-day delivery, it was widely dismissed as something out of science fiction which would never actually be implemented in real life. Now, its efforts to develop the small, unmanned flying machines for use in delivery have progressed so far that the company wrote a letter to the Federal Aviation Administration's saying that if it was not granted permission to test its drones in the U.S., it would take the program overseas.
Amazon wants to use drones to deliver packages in 30 minutes or less -- in a lot of cases less time than it take to drive to and from a store -- but current FAA rules effectively ban the commercial use of the small flying machines, The Wall Street Journal reported. The company is currently testing drones in England, which has been more supportive of the technology. The retailer has been limiting its testing in the U.S. to inside its facilities, but to move it forward, it wants to begin expanding its efforts. Amazon recently detailed the steps it would like to take in a letter to the FAA and can be viewed at GeekWire.
To ensure that our outdoor flight testing operations are as safe as possible, we have proposed to test on private property in a rural area of Washington State, away from people or crowds. We also have proposed to do so under the supervision of trained pilots, at low altitudes, below 400 feet above ground level ("AGL"), within visual line of sight, employing "geofencing" technology that will keep the vehicle confined to the test area, and abiding by the detailed safety measures outlined in our petition. These detailed safety measures are much stronger than those currently required for hobbyists and manufacturers of model aircraft, who already do every day what Amazon is proposing.
The company seems to be making a reasonable request given that fact that what they are asking permission for is something anyone could do if they had a few hundred dollars to spend at a local hobby shop. If the FAA does not bend, Amazon will move forward and it's possible that drone delivery could become a reality in Europe before the U.S.
Amazon is going old school
Delivery by bike messenger is not uncommon on the streets of New York and Amazon is testing this old school method as a way of offering one-hour delivery, a recent Wall Street Journal article reported. According to the article, the company has been holding time trials with a number of existing bicycle courier service companies in an attempt to find the fastest and the safest. The potential new delivery method, dubbed Amazon Prime Now is currently being operated out of the company's new Manhattan office building.
The program is only in the test phase. "Messengers participating in the trials are given an address and told to bike there within the allotted time," The Journal wrote. "Once they arrive, they are required to take a photograph of the building's address and return to the ground floor of the Amazon building."
Clearly delivery by bike would only work in urban settings, but those are also markets where shopping is more of a challenge than it is in the suburbs and the idea of not leaving the house in order to make a particular purchase may have more appeal.
It's all about convenience
Amazon knows that faster delivery is not going to be solved through a single solution and along with finding new ways to deliver, the company is also pursuing technologies that make it easier to order. The two concepts are linked as the more the retailer knows about what a customer needs, the better it can do to deliver the item at exactly the right time. In some cases, that does not mean faster delivery. It's more a case of using technology to make sure that just before you run out of paper towels, razor blades, batteries, or who knows what else, Amazon has put a fresh supply at your doorstep.
This type of tech-driven ordering is embedded in the Amazon DASH -- a wand which allows for ordering from Amazon's grocery service (which is only available in select markets) via verbal commands or scanning a barcode. It's also one of the functions of the new Amazon Echo, a home-based virtual assistant which the company is testing. Neither of these products is a delivery method. Instead, they are tools to facilitate getting an item exactly when you need it.
Foolish bottom line
Amazon certainly is being bold with its latest initiatives. However, quick delivery is not always what the retail giant needs. Amazon just has to be more convenient than going out and buying what you need from a store. Achieving that will take a menu of options, which has yet to be fully understood, but which the company seems well on its way to uncoding.
Daniel Kline has no position in any stocks mentioned. He buys a lot from Amazon, but is generally fine with two-day delivery. The Motley Fool recommends Amazon.com. The Motley Fool owns shares of Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.