I've noticed in the past that Google has special provisions for: Navigation, Autonomous Vehicle Control, or Enterprise Applications in the terms of use - http://code.google.com/apis/maps/terms.html - 10.2c.
Google has all the data to know the exact steps between the location of the product in inventory and the location of the doorstep of the customer. I could see them reducing cost of delivery in the following ways:
1. Using automated routing tools to allocate delivery resources in real-time. Currently, a human dispatcher can account for up to 35% of the cost of a same-day local delivery. Straight from an algorithm to a mobile phone is cheaper.
2. Using delivery contractors to collect video data to help build in the direction of an even richer google maps street view.
3. Eventually using autonomous vehicles to replace the human driver. I'm not saying this will happen any time soon, but I could see certain sections of city roads being approved for autonomous vehicle use in the next 3-5 years. Especially if google is pushing it while demonstrating safety. Paying a human driver can account for up to 60% of the cost of a same-day local delivery.
Also, there are some intangible aspects of having the relationship with a customer at their doorstep. Creates some advertising opportunities and gives nice contextual data about the customer.
Anyhow, being fairly familiar with the space I think Amazon and Google moving in this direction will really evolve online retail. More shipping options on products; more goods being shipped locally (for cheaper); more control over the delivery chain; visibility of exactly where your package is on the way to your house. That is the kind of innovation we can expect to see if google finds a way to leverage its data towards lower delivery cost.
Delivery services have been using routing software for years. UPS got a bunch of press attention for it several years ago. The concept of a crusty old lumbering behemoth that won't embrace new technology is largely mythical.
Market disruption doesn't involve increasing efficiency, the incumbents can always increase efficiency the exact same way you did, on a massive scale. You have to somehow alter the market itself, change what the customers expect.
"Delivery services have been using routing software for years" - yes, but not on a real-time basis. Solving real-time resource allocation vs routing a driver on pre-scheduled deliveries (like UPS) is a different problem with more complexities.
E-courier in the UK (http://www.ecourier.co.uk/) is one example of such a tool implemented at scale - they've demonstrated lower cost and compete successfully on lower pricing. And, guess what one of their founders just left to do? Basically created the UK version of Amazon Prime+ (http://www.shutl.co.uk/), leveraging the E-courier delivery service for efficiency..
Often the way to alter the market is to lower cost below a threshold where new utility can be provisioned to customers.
Google has all the data to know the exact steps between the location of the product in inventory and the location of the doorstep of the customer. I could see them reducing cost of delivery in the following ways:
1. Using automated routing tools to allocate delivery resources in real-time. Currently, a human dispatcher can account for up to 35% of the cost of a same-day local delivery. Straight from an algorithm to a mobile phone is cheaper.
2. Using delivery contractors to collect video data to help build in the direction of an even richer google maps street view.
3. Eventually using autonomous vehicles to replace the human driver. I'm not saying this will happen any time soon, but I could see certain sections of city roads being approved for autonomous vehicle use in the next 3-5 years. Especially if google is pushing it while demonstrating safety. Paying a human driver can account for up to 60% of the cost of a same-day local delivery.
Also, there are some intangible aspects of having the relationship with a customer at their doorstep. Creates some advertising opportunities and gives nice contextual data about the customer.
Anyhow, being fairly familiar with the space I think Amazon and Google moving in this direction will really evolve online retail. More shipping options on products; more goods being shipped locally (for cheaper); more control over the delivery chain; visibility of exactly where your package is on the way to your house. That is the kind of innovation we can expect to see if google finds a way to leverage its data towards lower delivery cost.