From an article at Remains of the Day
Amazon's Glass Growth Ceiling
"For me, in strategic planning, the question in building my forecast was to flush out what I call the invisible asymptote: a ceiling that our growth curve would bump its head against if we continued down our current path. It's an important concept to understand for many people in a company, whether a CEO, a product person, or, as I was back then, a planner in finance.
"Amazon's invisible asymptote
"Fortunately for Amazon, and perhaps critical to much of its growth over the years, perhaps the single most important asymptote was one we identified very early on. Where our growth would flatten if we did not change our path was, in large part, due to this single factor.
"We had two ways we were able to flush out this enemy. For people who did shop with us, we had, for some time, a pop-up survey that would appear right after you'd placed your order, at the end of the shopping cart process. It was a single question, asking why you didn't purchase more often from Amazon. For people who'd never shopped with Amazon, we had a third party firm conduct a market research survey where we'd ask those people why they did not shop from Amazon.
"Both converged, without any ambiguity, on one factor. You don't even need to rewind to that time to remember what that factor is because I suspect it's the same asymptote governing e-commerce and many other related businesses today.
"Shipping fees.
"People hate paying for shipping. They despise it. It may sound banal, even self-evident, but understanding that was, I'm convinced, so critical to much of how we unlocked growth at Amazon over the years.
"People don't just hate paying for shipping, they hate it to literally an irrational degree. We know this because our first attempt to address this was to show, in the shopping cart and checkout process, that even after paying shipping, customers were saving money over driving to their local bookstore to buy a book because, at the time, most Amazon customers did not have to pay sales tax. That wasn't even factoring in the cost of getting to the store, the depreciation costs on the car, and the value of their time.
"People didn't care about this rational math. People, in general, are terrible at valuing their time, perhaps because for most people monetary compensation for one's time is so detached from the event of spending one's time. Most time we spend isn't like deliberate practice, with immediate feedback."
Robin says:
Shipping fees will only go up, even if Amazon et al succeed in removing transport labor fees like drivers, stock picking, order loading. Because it all depends on cheap affordable energy, and energy will not be cheap and affordable much longer and, after that, will not be cheap and affordable again until many generations have passed.
As fossil fuels become too expensive to extract and refine (as is already the case with tar sands oil although few will admit it), this (oh do please Click to Enlarge: it is the loveliest Xmas picture ever I've seen)...
...will increasingly rely on this:
Oh dear. What could possibly solve this problem? What is that mysterious blue gypsy wagon cresting the hill on the horizon? Why, that's no ordinary blue gypsy wagon. It's a Treasure Truck!
"Fortunately for Amazon, and perhaps critical to much of its growth over the years, perhaps the single most important asymptote was one we identified very early on. Where our growth would flatten if we did not change our path was, in large part, due to this single factor.
"We had two ways we were able to flush out this enemy. For people who did shop with us, we had, for some time, a pop-up survey that would appear right after you'd placed your order, at the end of the shopping cart process. It was a single question, asking why you didn't purchase more often from Amazon. For people who'd never shopped with Amazon, we had a third party firm conduct a market research survey where we'd ask those people why they did not shop from Amazon.
"Both converged, without any ambiguity, on one factor. You don't even need to rewind to that time to remember what that factor is because I suspect it's the same asymptote governing e-commerce and many other related businesses today.
"Shipping fees.
"People hate paying for shipping. They despise it. It may sound banal, even self-evident, but understanding that was, I'm convinced, so critical to much of how we unlocked growth at Amazon over the years.
"People don't just hate paying for shipping, they hate it to literally an irrational degree. We know this because our first attempt to address this was to show, in the shopping cart and checkout process, that even after paying shipping, customers were saving money over driving to their local bookstore to buy a book because, at the time, most Amazon customers did not have to pay sales tax. That wasn't even factoring in the cost of getting to the store, the depreciation costs on the car, and the value of their time.
"People didn't care about this rational math. People, in general, are terrible at valuing their time, perhaps because for most people monetary compensation for one's time is so detached from the event of spending one's time. Most time we spend isn't like deliberate practice, with immediate feedback."
Robin says:
Shipping fees will only go up, even if Amazon et al succeed in removing transport labor fees like drivers, stock picking, order loading. Because it all depends on cheap affordable energy, and energy will not be cheap and affordable much longer and, after that, will not be cheap and affordable again until many generations have passed.
As fossil fuels become too expensive to extract and refine (as is already the case with tar sands oil although few will admit it), this (oh do please Click to Enlarge: it is the loveliest Xmas picture ever I've seen)...
...will increasingly rely on this:
Oh dear. What could possibly solve this problem? What is that mysterious blue gypsy wagon cresting the hill on the horizon? Why, that's no ordinary blue gypsy wagon. It's a Treasure Truck!
Behold the mobile Amazon warehouse jam auction. Technically, it's not really a trickster jam auction, but close enough. Give it time and it will be. Let us be grateful that, even if the truck may soon be self-driven, the sales will not. It still requires live human beings to jump up and down hollering 'woohoo'. It takes a sucker to sucker suckers, and robots are no suckers. They work hard for their money:
P.S. The following digresses from the topic at hand, but relevantly so:
Robots are Malfunctioning, Hurting People
"A mounting list of robot-related accidents has experts questioning whether the devices will be prone to more dangerous malfunctions or even programmed attacks. Notable mishaps that have been documented include a robotic security guard knocking over a child at a California shopping mall, a demonstration robot smashing a window at a Chinese conference—it caused a bystander to get injured, and 144 deaths in the United States caused by robotic surgery. All this according to security firm IOActive."
P.P.S.: Gartner Hype Cycle
The Gartner Hype Cycle describes a particular way that the media over-inflates people's expectations of new innovations in comparison to how evolved they actually are for a particular market segment's needs.
"Windermere Buying Hierarchy
"The Windermere Buying Hierarchy describes four different improvement focuses that an innovation optimizes over time. First, it's trying to solve for functionality, then reliability, then convenience, and finally price. This loosely maps to the stages of Wardley Evolution."
Plus, an icky interactive bioprint of this mutant marketing octopus:
And One Ring to bind them all...
Let us not forget to sing:
Step Right Up
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