Ebay and Amazon competing on infrastructure

Ebay announced today that they’ll offer same-day delivery, effectively saying, “Me, too” to anyone tempted to head over to Amazon for gratification within hours. EBay Now will start out in San Francisco, one of the easier places to offer this service (extremely avant-garde, lots of buyers and sellers, small physical area). Of course this won’t be for the curio or used iPhone seller/buyer, but will be for people shopping high-volume retailers like Target and Walgreens.

What Ebay and Amazon are doing is not magical. It reflects how far both companies have come in creating a technology infrastructure that is ahead of the retail game. As the world moves faster, retail is undergoing massive changes that allow those with the right technology to understand supply chains and pricing, manage inventory, know the customer, make personalized offers and now, same-day delivery.

There’s a second angle…as Amazon prepares to charge sales tax in several states, this gives them a way to cut down the advantage that change brings to the local retailer (who lobbied for the law) by shortening delivery times in general. Not the first time that a law backfires on its writers.

Nothing new

Same-day delivery is not new. It first arrived in the 90′s with the Internet. It was a flop, but not because of the Web. Companies were completely rooted in a retail model that wasn’t able to manage a new way of doing business. Old processes don’t work for new models.

It isn’t a coincidence that the two companies doing this now are both built on the new way of doing retail. Both have been using process modeling and workflow to streamline operations, powerful B2B tools to move data, Big Data and analytics to measure and promote loyalty, mobile apps, complex event management to sense and respond to their environment, in-memory (real-time) computing and a host of other technologies longer than anyone else. Same-day delivery brings their investment together very nicely in a way that is über-competitive.

If EBay and Amazon are successful, this will change the face of retail.
UPDATE: The New York Times also commented on the side effects of the new laws.

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Christopher Taylor