• About Tom Dougherty

    Tom Dougherty CEO, Stealing Share

    Tom Dougherty is the President and CEO of Stealing Share, Inc., and has helped national and global brands such as Lexus, IKEA and Tide steal market share over his 25-year career.

    An often-quoted source on business and brands, he has been featured recently by the New York Times and CNN, discussing topics ranging from television to Apple to airlines.

    Tom also regularly speaks at conferences as a keynote and break-out speaker. To find out more on inviting him to your speaking engagement and view a video of him speaking, click here.

    You can also reach him via email attomd@stealingshare.com.

    Follow me on Twitter

Amazon’s gamble with planes for Prime Air

Amazon recently showed off one of its new 767s that will ship some of its products purchased through the site, with Prime Air printed on its side. Last spring, Amazon announced that it was going to lease 40 such planes in an effort to curb some of its shipping costs.

Prime Air
Amazon Prime Air planes are soon to be crowding the skies.

Recently, shipping costs have outpaced sales growth, cutting into Amazon’s bottom line. In fact, in 2015, Amazon spent a whopping $5 billion on shipping expenses. Leasing the planes is a pretty clear demonstration of Amazon’s desire to streamline its logistical and delivery network.

Amazon trucks have delivered its products for quite some time, particularly with its 2-hour delivery service, Amazon Now, and its grocery fulfillment, Amazon Fresh. However, manning an airplane fleet is a much bigger and costlier proposition and is sure to disrupt what we know of traditional air shipments. Amazon’s hope is that the Prime Air planes will substantially reduce that $5 billion shipping cost.

Prime Air planes may not be such a gamble.

What does this mean for UPS and FedEx? They both should be extremely worried. Both FedEx and UPS depend on Amazon, with the online retail giant accounting for a large share of its business. But you can’t stop progress and it naturally fits for Amazon to take on those duties on its own.

For it to work, Amazon must secure an internal delivery and logistical system that also makes great brand sense. (Much like when FedEx purchased Kinko’s years ago in part because the brands of FedEx and Kinko’s aligned with each other so well – each were about piece of mind.) Amazon’s brand features a sense of discovery and convenience because it has everything you need that you can get easily. A key component of that is actually getting the physical items to the person who ordered them. That’s where the Prime Air planes fit in.

If Amazon can do it with the same or better efficiency as FedEx and UPS, why would Amazon do anything else?

Think about it. Amazon only has to do it as well as FedEx and UPS for this to succeed. That could be the catch because, if Prime Air can’t match that service level, the Amazon brand could be damaged significantly.

However, my money is on Amazon.

Leave a Reply

Your email address will not be published. Required fields are marked *