Amazon's Parcel Delivery Takeover

I estimate that in max. 3 years max #amazon will start sowing together its physical B2C locations

• Whole Foods, Amazon Go, further acquisitions, partners

with its experience in fulfillment & shipping

• e.g. proprietary fulfillment, FBA - Fulfillment By Amazon, end-to-end shipping from bulk like planes and ships to the last mile, and its network of delivery service providers

The result will be Amazon Parcel Delivery, open for the public. With Amazon's borderline-insane customer focus & reliability, data- and more and more AI-based business, and unmatched efficiency & rentability, I expect Amazon to give the existing providers in many top-tier markets a run for their money, and to be able to take over emerging markets with its well-known extremely fast roll-out speed.

Since many of the current shipping & parcel delivery providers like Deutsche Post DHL are on the opposite spectrum of customer satisfaction*, and are way less inefficient than Amazon, I expect them to not stand a chance in B2C. While in B2B, long-term relationships and contracts matter, in B2C, if we know one thing, then we know that customer behavior changes at the blink of an eye.

With its convenience, and maybe a little kicker like free parcel pickup at your doorstep, with its widely-used app, its indoor delivery options, underpinned by what is one of the (THE?) most efficiently-built logistics & fulfillment networks worldwide, Amazon could potentially sweep the market. And once most people use Amazon for their B2C shipping & parcel delivery needs, who knows what's next. The B2B parcel shipping takeover? Maybe even Amazon as a provider for traditional mail delivery? Amazon logistics, for larger and larger goods?

Do you know that Amazon already owns a giant fleet of cargo planes and is ordering more and more, or that it has been granted a container shipping license between US and Chinese ports, which allows it to offer traditional container shipping at wholesale rates? With more market cap and free-flowing cash than any other company in the sector, Amazon does not only have the brain, it also has the muscle**.

Amazon is building the most cost-efficient and trusted network of matter moving across the globe. Its efficiency, scale, and convenience are unmatched. If Amazon ventures into B2C parcel shipping and delivery (and I highly expect it to do so within the coming years), it will profit from economies of scale that could turn its P/E ration into the asteroid that kills the parcel and delivery shipping dinosaurs. If existing service providers want to have the chance to coexist, they better roll up their sleeves and get busy now, OUTSIDE of their current companies - I do not expect e.g. DHL's or Royal Mail's current structure to allow for a fast-enough reaction to counter Amazon's attack.

Existing players have huge gaps to fill in terms of data-based understanding of their own networks & businesses, their customer's needs, and their efficiency problems in high-enough resolution. And, speaking in Eric Schmidt's words, they need to understand what's different now. The fundamental shift in the market is customer centricity and agility of a kind that is yet to be understood, let alone acted upon, by the establishment. Amazon acts like a startup, exposing its assets to constant scrutiny. Established providers act like... well, like established providers, protecting their assets as much as they can and hardly reacting to their customer's needs.

Ever stood on line at a parcel delivery shop for ages, only to receive bad service. and ask yourself why you had to carry your parcel there anyway? Or received a parcel in bad shape by a grumpy delivery guy, or just a piece of paper saying they could not reach you, even though you were home and waiting? Then you know one very visible end to what's wrong with traditional service providers. Ever tried to return something to Amazon via its customer service because you were not satisfied? You catch my drift...

What do you think - will the traditional shipping companies be able to withstand Amazon's takeover?

Disclaimer: I am in no way affiliated with Amazon, and this article is not paid for. It represents my personal analysis and opinion.

* Based on customer development, and personal lifetime observation. DHL claims 90+% customer satisfaction in its Corporate Responsibility Report of 2015. It also claims it constantly improves its service with net promoter score models (NPS - feel feel to ask me about those if you don't know them). I do not trust these numbers. Do you?

** Market cap DHL as of today: 32.7 Bn, market cap Amazon 780.7 Bn