Pando

Does Amazon Local forecast the company's future as a delivery company?

By Nathaniel Mott , written on December 4, 2014

From The News Desk

Amazon is testing a new service that allows consumers in Seattle to order food from more than 100 local restaurants and pay for the bill through their Amazon accounts.

The service complements Amazon's efforts to sell groceries in cities like San Francisco, New York, Los Angeles, and the company's hometown of Seattle. One service offers the items necessary to make a home-cooked meal; the other a bevy of pre-cooked options.

It also raises an interesting question: might Amazon become less of a retailer and more of a delivery company that makes it easier to buy anything from anyone at any time?

Amazon's current iteration is based on a group of warehouses from which consumers can purchase goods that will be shipped to their doors within just a few days or hours. (Yes, in addition to experimenting with food and groceries, Amazon is working on same-day delivery in an increasing number of large markets, like those listed above.)

But the warehouses aren't the important part in that process -- the ability to order an item, pay for it without having to enter credit card information, and have it appear a while later is the reason why people shop Amazon. Warehouses are a means to an end. So why should Amazon expand its infrastructure when it can focus on everything else?

This program supports the idea that it doesn't have to. It can partner with restaurants to get people what they want, when they want it, without having to offer their payment information to another company. Amazon has their credit card, it has their address, and it has the perception of being the company that sells, or at least delivers, anything.

Amazon could decide that this program isn't worth pursuing. Maybe it really wants to be the one making, selling, and delivering everything instead of merely acting as the conduit between a consumer's desires and the businesses that can fulfill them. But if I were running a delivery company, I would be very, very worried about this program.

[illustration by Hallie Bateman]