Amazon Drones & Offline Spend


There’s been a lot of hype around Jeff Bezos’ announcement on 60 Minutes that Amazon is building drones (see above) that will ship packages from warehouses to consumers’ homes within 30 minutes.  While this may seem crazy, it’s really a very well calculated strategy aimed at getting access to one of Amazon’s only untapped markets: offline consumer spend.

Offline commerce remains a trillion-dollar industry that most online sellers have yet to tap. It’s still true that most consumer disposable income is spent locally -- restaurants, bars, coffee shops, gas stations, salons, malls, etc.

Amazon and other online retailers have struggled to tap into this marketplace. But lots of them are trying hard...

Consider a company like Trunk Club that sends consumers a trunk full of clothes every once in a while, allowing the consumer to keep what they like and send back what they don’t. With free shipping.

Or Dollar Shave Club that sends razors and other toiletries each month at rock-bottom prices. Check out their brilliant promotional video that went viral a while back.

Or Warby Parker that ships you three different styles of glasses at no cost so you can try them on. And you ship them back for free. For every pair that's sold they donate a pair to a person in a underdeveloped country.

Or Groupon that sells access to local salons or gym memberships or karate lessons at steep discounts.

All of these companies have built strategies that are attempts to tap into local, offline spend -- and the Amazon drone is no different. By shortening delivery times they're hoping to keep people out of stores and in their homes buying goods online. This is a fun trend to keep an eye on.