Digital commerce's 'jump the shark' moment

The “60 Minutes” love letter to Amazon, which took the form of a 14-minute segment that amounted to an infomercial regaling the wonders of the Seattle-based “everything store,” has resulted in more drone-related social media humour than could be assembled by a gathering of every staff writer who has worked for “SNL” since its inspection.

“Amazon Prime Air,” the third most searched term on Google several days after airing, will be remembered as digital commerce’s “jump the shark” moment when Jeff Bezos morphed into Mr Wizard luring a gaga Charlie Rose into what looked like Wayne Enterprise’s secret lab, where he went eyeball to eyeball with the cyber-retailer’s flying delivery boy.

Unsurprisingly, next-day, overnight and same-day delivery has become the talk of digital marketers and industry pundits—not to mention a socially connected world in which everyone is the reincarnation of Henny Youngman. The timing of discussions related to the merits and business models aligned to various delivery thresholds is particularly noteworthy in the wake of a billion-dollar baby called Cyber Monday - the latest Red Letter Day for digitally driven, mobile-enhanced commerce.

Delivery elasticity is a mirror with two sides. As a former retailer, I learned the hard way that the costs you never expect or plan for are the ones that bite you in the butt. In keeping with the holiday shopping season, I can speak from experience that it’s generally a great time for retailers, even those who are rank amateurs (referring to myself).

At first I was happy to take special orders for products not in my store that required extra sourcing and quick ordering, but I soon came to realise such transactions produced low margins given that providing exceptional customer service included me eating the cost of express delivery. The topic of mega-retailers moving toward fast-twitch delivery is no doubt giving small business merchants a headache or two.

Being successful in finding the right delivery paradigm for your product or service will require multi-dimensional thinking. Digital marketers, no doubt will need to work side by side with their IT counterparts to strategically implement advanced logistics systems such as Descartes, which can match transaction requests to appropriate local inventory warehouses.

Marketers must think in parallel about their customer base and bottom line. Is my product something a customer needs the same day or is offering that extra service little more than retail grandstanding? Perhaps the need to offer expedited delivery is seasonal which is that’s why eBay and Google are waiving their customary service charge for same-day delivery during the holiday season. Common sense dictates that perishables need to be sent on their way pronto while a customer should expect to wait a few days for a handcrafted work of art.

Along those lines, unless you are a retailer the size of Wal-Mart, Target or Amazon, it’s a slippery slope to offer ultra-expedited or same-day delivery at a loss assuming the lifetime value of that buyer will make up for the upfront red ink. A digital commerce world filled with comparison shopping, price alerts, social network cues and flash sales is not conducive to long-term loyalty.

While most digital marketers are still buzzing about Amazon’s army of identifiable flying objects, I point to something else Bezos said when asked by Charlie Rose about his company’s ability to disrupt many markets in which it becomes dominant. “People can complain about (us being a disruptor), but complaining is not a strategy.”

I agree—complaining is not a strategy but neither is being fixated on your competitor’s blue sky whims. Going beyond the hyperbole of Amazon’s homage to George Jetson, the big takeaway from Bezos’ newsmagazine segment is the persistent recitation of his company’s mantra—“it starts with us being customer centric.”

Those are words for every digital marketer to live by and that’s a motto that should be expressly delivered to your constituents for the holiday season and beyond.

If you missed the “60 Minutes” interview featuring that magnificent man and his flying machine, go here and see for yourself.

Allen Weiner is a Research VP at Gartner.