The ad shows a new prototype model of the Prime Air drone — this one looks larger and quite a bit more custom-tailored to deliveries than the model first shown a couple of years ago. It features two propeller systems: one for vertical takeoff and another for horizontal travel to the destination. In an email, an Amazon spokesperson calls it “part helicopter and part airplane,” adding that the design lets it “fly long distances efficiently and go straight up and down in a safe, agile way.”
“DIFFERENT DESIGNS FOR DIFFERENT ENVIRONMENTS.”
This isn’t the only drone Amazon is working on. The spokesperson notes that “It is one of many prototype vehicles we have developed” and Clarkson adds in the commercial that “In time, there’ll be a whole family of Amazon drones; different designs for different environments.” In this demo, it appears customers will set up a little landing zone in their backyard that the drone can sense and land on to deliver the package.
The other details of this delivery system remain the same however: Amazon is pushing the FAA to allow it to use airspace below 400 feet to deliver packages weighing less than five pounds to houses 10–15 miles from warehouses. Clarkson is also sure to note the drone’s safety features, which include Amazon’s proposed “sense and avoid” technology. Since there are too many drones for air traffic controllers to handle, such a system would allow drones to theorhetically avoid obstacles and other aircraft on their own.
The whole process from order to delivery is supposed to take less than 30 minutes, but it faces many, many regulatory hurdles before it can become a reality in the US. The company itself notes that “putting Prime Air into service will take some time, but we will deploy when we have the regulatory support needed to realize our vision.” A spokesperson also adds, “One day, seeing Prime Air vehicles will be as normal as seeing mail trucks on the road.” It’s likely this highly-produced ad is meant to turn up public pressure on the FAA so Amazon can bring its dream drone delivery system to life.
Amazon, which prides itself on being surprising, is doing two predictably unpredictable things this week.
First, the company is offering better benefits to its 222,000 employees. The hard-driving online retailer has traditionally not supplied its workers with many perks, at least compared to its peers in the technology sector. Jeffrey P. Bezos, Amazon’s founder, once looked toward Microsoft and said if Amazon became “a country club,” it would die, according to a book by John Rossman, a former Amazon executive.
So Amazon stayed lean in the smallest things. It eschewed, for example, free snacks. And it lagged in some of the biggest things: It offered no paid paternity leave and eight weeks of maternity leave.
On Monday, the biggest things changed. Amazon employees learned that birth mothers would now get 20 weeks of leave and fathers would get up to six weeks. Amazon also announced a flexible return-to-work program and an ability to share leave with a spouse who does not work for the retailer. These benefits, the retailer said, “give you more time and more choice in how to manage your leave in the way that works best for your family.”
Enhanced family-friendly policies have been announced at a rash of companies, includingMicrosoft and Netflix. As the tech world competes for talent, benefits are a key selling point.
Amazon’s intense workplace was the subject of an article in The New York Times in August. Asked if Amazon was improving its benefits in reaction to the article, a spokesman pointed to a line in the announcement that said, “We review our benefit programs annually and began considering our leave policies in early 2015.”
In an equally unlikely event, Amazon is opening its first store on Tuesday in the University Village mall in Seattle. An Amazon store has been rumored, and sometimes even reported as real, ever since the online retailer first made its mark in the late 1990s. In the last year alone, there have been reports of a store in Manhattan and Silicon Valley. There were also stories about negotiations to take over some of the bankrupt RadioShack outlets.
This time, however, it is really happening. The Amazon bookstore is called, naturally enough, Amazon Books. It will stock about 5,000 titles, which as stores go is relatively tiny.
In a note to its online customers, Amazon called the store “a physical extension ofAmazon.com.” The retailer, which is spending billions to refine and speed up home delivery, suggested that some people would come to the store to look at the books and then go home and order them online.
Barnes & Noble, the largest traditional bookseller, closed a 46,000-square-foot store in University Village at the end of 2011.
Local booksellers greeted the project — news of which leaked out gradually over the last month as Amazon Books stocked up and hired employees — with some befuddlement.
J. B. Dickey, who owns Seattle Mystery Bookshop, said it might be a large corporation’s small vanity project.
“A brick-and-mortar store is antithetical to what they’re about,” Mr. Dickey said. “The whole point of Amazon is getting what you want through your keyboard. What’s the point of opening a shop that demands people drive to it?”
He cited all the drawbacks of a traditional store, including the need to pay rent, hire employees, work with low margins and persuade customers to battle Seattle’s merciless traffic. Amazon plans to charge the same prices in the store as it does online.
The company remained noncommittal about its longer-term plans.
“We’re completely focused on this bookstore,” Jennifer Cast, vice president of Amazon Books, told The Seattle Times. “We hope this is not our only one. But we’ll see.”
Facebook is testing new ad features that it claims will enable one-click shopping from within its News Feed
Facebook is testing a new way to let users shop for clothes and other products directly from their News Feeds, in an effort to move further into e-commerce and compete with Amazon’s retail offerings.
The service, which is part of Facebook’s new ad experience called Canvas, means that a user can click on an ad from a clothing shop, for example, and see an expanded list of products which they can then buy right on the spot.
When the user has selected the item they want to buy, they will either be redirected to the retailer’s website to complete the purchase, or be offered the option to buy the item without leaving Facebook by clicking the “Buy” button in the ad in their News Feed.
“When people click on products from ads in their News Feed, the mobile websites they’re directed to often take a while to load and aren’t optimised, increasing the chance that people will drop off,” said Facebook in a blog post.
Facebook is also setting up a dedicated shopping section, based on its existing Pages feature, that will act as a “single place for people to more easily discover, share, and purchase products.”
Brands will be able to turn their Pages into virtual storefronts, where they can showcase their products. Facebook said businesses could choose whether to have this section link to their own retail websites, or allow people to buy directly from their Facebook Pages.
These Pages will then appear in a dedicated shopping section within Facebook’s mobile app, allowing users to browse among numerous brands and select items to buy.
“We’re looking to give people an easier way to find products that will be interesting to them on mobile, make shopping easier and help businesses drive sales,” Emma Rodgers, Facebook’s head of product marketing for commerce, told Reuters.
Facebook said that none of the credit or debit card information people share with Facebook when completing a transaction would be shared with other advertisers, and people can select whether or not they’d like to save payment information for future purchases.
Facebook has a wealth of data about users’ online behaviour, but until now it has not tracked any purchasing behaviour.
Jack Kent, senior analyst at IHS Technology, said the introduction of commerce in its app will deepen its understanding of the consumer, which will drive its developments in its ad offering, AR experience and messaging apps.
The new service could also help to drive mobile purchases, which currently make up less than 2 per cent of all retail sales, according to research firm eMarketer.
The firm expects Facebook to take in $12.52bn in worldwide mobile ad revenue in 2015, a jump of 68.7 per cent over last year. In 2014, Facebook captured $7.42 billion in worldwide mobile ad revenue.
Now, it appears Amazon is making moves to try and get a better idea of what issues, if any, plague its workplace. Bloomberg reports that the company is expanding use of an internal system called Amazon Connections to get a sense of what’s going on in the office on a daily basis. As the outlet reports, the system “poses questions daily to employees to collect responses on topics such as job satisfaction, leadership, and training opportunities.”
The responses aren’t entirely anonymous — the HR team tasked with analyzing the responses can see where the feedback is coming from — but management is only provided nameless, general reports on workplace conditions. The system reportedly builds on an initiative that started last year for Amazon’s blue collar employees, and hopefully it helps make working at the retail giant a more enjoyable experience.
The storefront for handcrafted items is another effort by the e-commerce giant to become the everything store while simultaneously gunning for Etsy’s business.
Amazon already sells tens of millions of products. Why not a handmade, reclaimed-wood coffee table that doubles as a wine rack?
With that in mind, the Seattle-based company on Thursday launched Handmade at Amazon, a specialized storefront that promotes only handcrafted goods and the artisans who create them, a market now dominated by much smaller e-retailer Etsy. The program will start with over 5,000 artists, most from the US, and more than 80,000 listings of artwork, jewelry and other items. Handmade will only be available on the main Amazon.com site.
“We’re entering this space because our customers have told us that they want it,” said April Lane, Amazon’s category leader for Handmade. “We get thousands of searches every day for handmade items.”
Beyond Amazon’s typical fare of Legos, Blu-ray discs, paperbacks and diapers, customers will now be able to shop for beaded bracelets from Ghana and art prints from Austin.
Handmade serves as yet another example of Amazon’s outsized ambitions to be the everything store for everybody, and adopting any successful e-commerce model it sees along the way. The company already sells millions of mass-produced products, and it has started to focus on niche areas so it can keep expanding its inventory. The world’s largest e-commerce company by sales opened two other online stores this year, Amazon Launchpad and Amazon Exclusives, which both highlight products from small, up-and-coming companies. It is also branched into services, such as its Home Services marketplace for hiring a plumber or painter that’s become a new competitor to Angie’s List.
Amazon’s push into handmade items creates a major headache for Etsy, a specialty marketplace focused on artists’ wares. Etsy’s stock has been in decline since it went public in April, as the company has been accused of failing to control counterfeit sales on its site. Amazon’s move into Etsy’s core business, which was first reported in May, has pushed down the Brooklyn, New York, company’s shares even further.
Amazon has been aggressively courting Etsy sellers, who could profit from access to Amazon’s roughly 280 million active shoppers, more than 10 times Etsy’s 21 million active buyers.
Etsy’s counterfeiting issue and its move to allow sellers to start mass-producing items have frustrated many Etsy artists, said Wedbush analyst Gil Luria. These artists didn’t have a sizable online alternative to Etsy, though.
“That all changes with Handmade at Amazon,” Luria said. “For Etsy, this is a big problem.”
Etsy argues that it has spent 10 years developing tools for artists to expand their businesses, including educational resources, information on craft fairs and a wholesale service to connect sellers to boutiques. In a July report, the company said that only about 0.5 percent of all its listings have been affected by intellectual property takedown notices and that it dedicates “substantial resources” to dealing with site violations.
Amazon said it plans to be more restrictive about the sellers it lets into Handmade. This may help Amazon avoid counterfeiting allegations.
“We believe we are the best platform for creative entrepreneurs, empowering them to succeed on their own terms,” Etsy CEO Chad Dickerson said in a statement. “Etsy has a decade of experience understanding the needs of artists and sellers and supporting them in ways that no other marketplace can.”
A new place for artists
Those artists include Michael Graham, a former high school science teacher who makes furniture such as credenzas and coffee tables out of reclaimed wooden grape boxes from his Los Angeles studio.
Graham, 41, has been selling items on Etsy for two years but jumped at the chance to join Handmade so he could put his wares in front of one of the largest buying audiences in the world.
“Many people haven’t heard of Etsy, but everyone’s heard of Amazon,” Graham said. “I think it’s going to be a game-changer.”
Amazon’s roughly 15 percent commission (after a one-year, 12 percent promotion rate) is substantially higher than Etsy’s 3.5 percent cut, but Graham said it is worth it to reach Amazon’s larger customer base.
Darla Garfield, 37, who makes jewelry atop her dining table in New Plymouth, Idaho, is also excited to bring her goods to Amazon.
“I love the handmade idea, and just strictly handmade,” said Garfield, who sells her goods under the shop name Sheekydoodle. “That’s what made Etsy beautiful when I joined five years ago.”
Both artists plan to continue selling on Etsy.
While Etsy’s business has been growing fast, the company brought in only $196 million in revenue last year. That amount is tiny for Amazon, which reported sales of $89 billion last year.
Amazon’s marketplace business, which lets third-party retailers sell on its site for a commission, has become a major profit engine for the company, Wedbush’s Luria said. So any way Amazon can grow that business will benefit its bottom line.
Even though Amazon is often perceived as the big bad wolf in e-retail, Luria said he doesn’t expect any backlash from the artist community over Handmade.
“Not only will sellers accept this with open arms,” he said, “but so will buyers.”
Amazon’s Lane said Handmade is starting with just six categories: home, jewelry, artwork, stationery and party supplies, kitchen and dining, and baby. The immediate goal will be to expand into more categories, she said.
Most goods will be shipped directly by artists, but Amazon will use its massive logistics and warehouse infrastructure to ship about 700 items so far.
“The artisan response has been great,” Lane said, “so we’re excited to see how customers respond.”
The Federal Aviation Administration finally laid down the legal groundwork for the operation of small drones in February, but as the governmental body showed this week, those laws don’t mean you can just fly unpiloted craft wherever you like. The FAA has proposed its biggest fine ever — $1.9 million — to be levied against aerial photography company SkyPan International for illegal drone flights in the busy airspace above New York and Chicago.
The FAA says that SkyPan conducted 65 unauthorized drone flights over urban areas between March 21st, 2012 and December 15th, 2014. The drones involved allegedly lacked a two-way radio, transponder, altitude-reporting equipment, airworthiness certificates and effective registration, while SkyPan itself failed to get a valid Certificate of Waiver or Authorization for the flights. The FAA says that of the 65 flights, 43 of those flights reportedly took place in New York’s tightly restricted Class B airspace, and took off without receiving air traffic control clearance to do so.
The FAA criticized irresponsible drone use in August, noting that pilots had already reported more than 650 close calls with small uncrewed craft in the first eight months of 2015 alone — more than double the 238 reports it filed in 2014. But SkyPan has defended its record, telling the National Journal that it has been conducting aerial photography in urban areas for 27 years “in full compliance with published FAA regulations,” and that it was “fully insured and proud of its impeccable record of protecting the public’s safety, security and privacy.” The company now has 30 days to respond to the FAA.
In a statement released on its website, FAA administrator Michael Huerta said that “flying unmanned aircraft in violation of the Federal Aviation Regulations is illegal and can be dangerous.” Huerta noted that the US has “the safest airspace in the world,” but said that “everyone who uses it must understand and observe our comprehensive set of rules and regulations.”
But SkyPan could argue those rules are far from comprehensive. Congress set a date of September 30th for the FAA to pull together blanket rules that would legalize the use of small drones, but after putting out proposed regulations in February, the aviation administration missed the deadline. It said that it may need until 2017 — or even later — to reach a consensus of opinion. Until then, the FAA has approved more than a thousand individual flights, but the US is still without federal regulations, frustrating both hobbyist drone operators and companies such as Amazon who plan to use drones to deliver items to customers.
The e-commerce giant jumps into the gig economy with the new program called Amazon Flex. The service starts in Seattle.
Amazon’s newest offering to the public: delivery jobs.
The online retailer on Tuesday rolled out a new program calledAmazon Flex, which lets regular people sign up to become on-demand delivery drivers. The project is starting in Seattle, Amazon’s hometown, but a company webpage said Amazon Flex will be coming soon to Manhattan, Baltimore, Miami, Dallas, Austin, Chicago, Indianapolis, Atlanta and Portland.
Amazon Flex will support Prime Now, the company’s new and quickly growing service that offers no-cost rapid deliveries of food staples, electronics and toiletries in about a dozen US cities and in London in the UK. The webpage, though, mentions that Flex drivers may deliver “other types of Amazon packages” in the future, leaving the door open for Flex helping power Amazon’s regular deliveries alongside the US Postal Service, FedEx and UPS.
The service makes Amazon a new participant in the gig economy, in which companies outsource jobs to on-demand workers, such as Uber and Lyft hiring private drivers or Postmates giving short-term jobs to couriers. Such business models have been criticized for not offering workers enough benefits, such as health insurance and paid sick days, and lawsuits have been filed against Uber and other firms on those grounds. Presidential hopeful Hillary Clinton in July blasted Uber and similar companies, saying they exploit those workers. Amid that blowback, grocery delivery company Instacart and valet service Luxe have moved to convert their contractors into employees.
However, Dave Clark, Amazon’s senior vice president of worldwide operations, told the Wall Street Journal on Tuesday that his company feels “very confident” in its approach for Amazon Flex.
For now, Amazon said it’s only bringing on drivers as Flex workers. It said workers can make $18 to $25 an hour delivering Prime Now packages. As with other gig economy jobs, these workers can schedule their own hours. Depending on the market, Prime Now currently uses networks of drivers, bike couriers or sometimes walkers to fulfill Prime Now orders.
Amazon Flex is one more program the company is working on to speed up deliveries so it can become an even bigger attraction for its Prime members, who pay $99 a year for no-cost, two-day shipping and other services. In an effort to coax more people to buy impulse items, food and whatever else they want without a trip to the store, Amazon has been expanding Prime Now, developing delivery drones and even delivering packages to customers’ car trunks in Germany.
The new hardware includes a $50 tablet and an updated Fire TV set-top box. Amazon’s strategy differs from Apple’s high-end approach but puts the two giants in more intense competition than ever.
David Limp, Amazon’s devices chief, puts two tablets on the table. One is a 10.1-inch Fire HD, among the e-commerce giant’s newest tablets. The other is an Apple iPad Air. The Fire HD has a few battered edges; the iPad’s screen is shattered.
Both went through stress tests at Amazon’s lab in Sunnyvale, California, Limp said, and the Amazon tablet emerged relatively unscathed.
The setup is more than a comparison of durability, though. It also symbolizes Amazon’s growing rivalry with Apple.
On Thursday, Amazon unveiled four new tablets and three television-related devices. This is the lineup Amazon will use to lure consumers during the all-important holiday-shopping season. Among the tablets, there are two new HD, or high-definition, devices, a $50 budget tablet and a “Kids Edition” tablet with a heavy-duty case. On the TV side, the new products include a $100 4K ultra-HD TV set-top box, a game controller and a video-streaming device with a remote control that does voice search.
“In the TV space, I think we go very much more head-to-head with Apple,” Limp said during a press briefing here Wednesday.
This is a rivalry, but not in the way you might expect. Apple and Amazon are attacking the consumer electronics world in very different ways. Apple does it with high-end, pricey devices. Its cheapest tablet is $270. Amazon courts a more budget-conscious consumer. Its least-expensive tablet costs $50.
For Amazon, the goal of selling hardware is to get people to spend money in its marketplace on items like movies, books, music and clothes. For Apple, the goal of selling expensive hardware is selling expensive hardware. That’s where Apple makes its money, but it also ties people to Apple’s world of software and services — where people also buy music and movies.
“It’s a growing rivalry at the services level,” said Tim Bajarin, president of the market research firm Creative Strategies.
The TV wars
Here’s something else that highlights the difference between the companies.
For its product launch, Amazon brought reporters to a rented house in the city’s North Beach neighborhood. The hilltop home had Amazon’s smiling logo on the door and a sweeping view of the San Francisco skyline. The goal: showcase the Fire TV in its natural habitat — a living room.
All of Amazon’s new TV products, from the remote control to the video game controller, will have built-in voice control by early next year for navigating menus or for playing or resuming a program. The devices make use of the company’s Alexa software, which Amazon introduced last year as part of its Echo speaker. The software, similar to Apple’s Siri, Microsoft’s Cortana and Google’s Google Now speech-recognition programs, can do tasks like tell you the weather forecast or the news.
Amazon isn’t the first company to bring voice search into its TV products, of course. Apple last week demoed an updated version of its set-top box, with Siri as a central feature. Google’s Android TV platform also has voice-search.
Tablets: Oranges and, er, Apples
When it comes to tablets, Limp downplays the competition. Each company’s tablet customers “don’t really overlap,” he said.
At a high level, however, both Amazon and Apple are trying to do the same thing with tablets: lead a resurgence in an ailing market. Shipments of the devices are expected to decline 8 percent this year, according to market tracker IDC.
Amazon’s new $50 tablet is telling of its low-end strategy. You can even buy five of them and get the sixth one free. They literally come in a six-pack casing, not unlike beer. Apple, by contrast, last week unveiled its most expensive tablet yet: a supersized screen aimed at workplace employees. The iPad Pro starts at $800 but jumps to more than $1,000 if you want a keyboard and stylus.
Other than the $50 option, Amazon’s new lineup includes a 10.1-inch HD tablet priced at $230 and an 8-inch tablet priced at $150. The $100 Kids Edition tablet comes with access to a child-friendly version of the Web, where users are only allowed to go to a collection of 20,000 age-appropriate websites and YouTube videos. Amazon also showed off a speed-reading tool called Word Runner, built into the tablets’ reading apps.
While Apple’s iPads have dominated the top end of the tablet market, Amazon has carved out a leading place for itself in tablets thanks to its focus on budget devices. Its tablets don’t have the high-end features and metal-and-glass bodies of Apple’s product, with customers instead getting good-enough features and plastic backs on several models. However, its lower-tier strategy has helped Amazon capture millions of customers who’d rather pay a fraction of the cost of an iPad.
“We’ve been on a mission to offer premium products at non-premium prices,” said Limp.
Apple finally refreshes its streaming-media box, adds a dedicated App Store and revamps its remote control for gaming and shopping.
Apple unveiled an updated connected TV box for the first time in three years Wednesday, turning Apple TV into a contender against its more modern rivals.
The revamped Apple TV weaves in Apple’s voice-controlled digital assistant, allowing users to search through Netflix, Hulu and other services connected to the device. It comes with a new remote control that incorporates a trackpad.
Apple also took a page from its own iPhone playbook, introducing a new operating system that supports a world of apps. Called tvOS, the software allows Apple TV to now run new kinds of media, including games and fitness programs.
“Our vision for TV is simple,” Chief Executive Tim Cook said at an event in San Francisco, where the company also revealed its updated iPhones. “We believe the future of television is apps.”
The new Apple TV, which will be available in October, comes as the consumer electronics giant finds itself battling companies like Roku, Google (with its Chromecast television plug-in) and Amazon to attract buyers. Some of those products already include voice-activated features. Amazon’s Fire TV also has an optional game controller.
Apple was early to streaming media though it was careful to position Apple TV as a “hobby.” Still, the company has sold 25 million Apple TVs during the product’s lifetime. But Apple hasn’t upgraded the Apple TV to a new generation since March 2012, and sales have suffered even amid rising consumer demand for online media. Competitors have been quick to capitalize on that demand by updating their products with new features and content, according to analysts.
The new version of Apple TV is more expensive than earlier versions (it currently costs $69) and pricier than its competition. An Apple TV with 32 gigabytes of storage costs $149, and one with 64GB is $199. By comparison, Roku sells a $100 streaming-media box and a $50 streaming stick. Amazon’s Fire TV box sells for $99 and its Fire TV Stick cost $39. Google’s Chromecast, which plugs into the back of a television, is $35.
The new Apple TV will include an App Store and a new remote control that responds to touch. With it, viewers can slide through a thumbnail display of movies, for example, or fast-forward through a show.
The remote also features a button that summons Siri, Apple’s voice-command digital assistant. Siri will search across Netflix, Hulu, HBO, Showtime and Apple’s own iTunes, but not direct competitor Amazon. Viewers can also use their voices to tell the Apple TV to jump ahead in a video, or find content by cast, director, age rating or date.
Apple on Wednesday showcased Apple TV running the Airbnb app for short-term rentals, Gilt for shopping and the game Crossy Road.
Apple TV will be sold in more than 180 countries by the end of the year.
And last month, the Wall Street Journal reported it had laid off “dozens” of Fire Phone engineers at its Silicon Valley research-and-development lab.
Stuart Miles, editor and founder of technology news website Pocket-lint, said he was not surprised by the decision to pull the phone.
“The phone industry is incredibly competitive, and it’s very foolhardy for any company to believe you can come in on your first product and make a difference.
“Amazon obviously believed it could launch something, which unfortunately didn’t gain any excitement.
“The dynamic perspective camera was pretty much seen as a gimmick which didn’t really add anything to the overall experience.”
Amazon is still selling its tablets, such as the Kindle and Fire. On Tuesday, the Wall Street Journal reported Amazon planned to launch a cut-price $50 (£33) tablet this Christmas, along with new tablets with 8in (20cm) and 10in screens.