What we need to understand prior to getting excited about Prime Air

Prime Air, at its simplest, is a mechanism to deliver goods using Unmanned Aircraft Systems, aka Drones. The video that was published today looks like a skunkworks prototype, a different idea nevertheless. Since we don’t know much beyond the video, we have to ponder about several things — technological, regulatory, commercial.

  1. Technological — We don’t know if drones themselves are subject to security issues. Can they be intercepted hence hijacked? Can they be vandalized or stolen? Can hackers control it to deliver to a differnet destination? Can the bad peeps plant in it something that’s dangerous or distasteful?
  2. Regulatory — FAA regulations are a big deal. But I imagine this will be managed well — when (Google) cars can drive without drivers, why can’t drones fly?
  3. Consumer issues — Where will it land? Should I be home to take delivery? How do I do returns? Will you send an empty drone back? Will Amazon charge extra for drone deliveries?
  4. Limitations — When will PrimeAir be primetime? Can I have California King beds delivered using drone? Or are they going to be limited to tiny things? Will you deliver anywhere? Or do I have to be in metro areas? What if I live in Utah? What if I live in Manhattan?

These are questions that accompany any disruptive technological invention. People asked same or similar questions when cars were invented or planes or trains or GPS or cellphones for that matter. These questions get answered in due course and there is no reason to look away or refuse to recognize the idea.

Let us say for a moment that PrimeAir was a bizarre joke. Or a April Fools joke on a December 1st. Or as some blogs suggest, a cheap marketing campaign for a Cyber Monday.

Does that mean the Walmarts and Best Buys can stop worrying about Amazon? I suspect the answer is NO. The legacy retailers (LRs) still have to be worried have managed to be plain morons, not realizing that Amazon has successfully done more things that sway customers away from LRs, than the LRs have done to keep their “visiting” customers. Some of these LRs, for example, won’t even match their own “online price” — which reflects that technological breakthrough made by LRs fall more in the “me too” category than something that rethinks the way they do business. For example, Amazon launched price check which enables people to visit the LRs, touch and feel what they wanted to buy, get comfortable around it, only to later scan the barcode and order it on Amazon. The only substantive edge the LRs had is the absence of instant gratification with Amazon, which in retail is a big deal. But this will become a thing of the past if PrimeAir really hits primetime. Even if PrimeAir was a poor joke, there are so many other things Amazon is doing to counter the setbacks of an “online-only” shopping experience.

On a separate note, Amazon is also proof that the CSRs are becoming less relevant. Most people really know what they want and they are just shopping for value or conveniences w.r.t returns etc.. As such, the subject matter expertise provided by the CSRs at LRs are despicable (Yes, Best Buy, I hate you for that).