Amazon Prime Day, Self-Driving Cars, and IoT

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The date was July 16, 2018. Amazon Prime Day, which was touted as a day of epic deals, suffered from an embarrassing technological snafu, where Amazon’s website content was replaced by a picture of a cute, white puppy dog, and the message “SORRY, something went wrong on our end.” It goes without saying that people were extremely upset.

The worst part of the snafu lasted about 90 minutes, from 3:00 p.m. – 4:30 p.m. Eastern Time. However, by then, the damage had already been done. Other retailers, such as Macy’s, Best Buy, Nordstrom, Target, and Walmart rolled out their own versions of promotions and sales to attract buyers to their sites. There was so much buzz around Amazon Prime Day that this date was known as the “Black Friday in July.”

When thinking about an event like this, what are some of the logistical challenges companies such as Amazon, UPS, and even the US Postal Service face in meeting their delivery demands, especially in places such as rural areas? How do they prepare for something like Amazon Prime Day?

When considering logistical challenges, the biggest challenge is efficiency with last mile delivery. The last mile means the transfer of goods from the warehouse shelf to your door. When you’re making deliveries to an urban area, like New York or Washington, DC, where people live in close proximity to one another, you can efficiently send out one delivery truck to cover the entire block. This is extremely efficient because the actual cost per delivery is relatively low. However, when you’re delivering to rural areas, where deliveries may be 50 miles apart, it becomes extremely costly to send out a truck to deliver a single beach ball. Especially, if you’re offering free shipping.

To overcome this challenge, companies are turning to alternative delivery solutions, such as local delivery subcontractors (also known as crowdsourcing), who can efficiently deliver a package in their hometown. Let’s not forget speed. Just because someone lives out in the woods, doesn’t mean they don’t want their new bathing suit, fast! Local contractors can fulfill those delivery demands efficiently and quickly, at a cost that is much lower than sending out a dedicated truck from the warehouse.

One example of a crowdsource startup is a company called Instacart, who claims to be able to deliver groceries from local stores to your door within two hours.

Future technology trends will challenge crowdsource companies, as online shopping demand increases and online retailers look to innovative new solutions to cut costs and increase profits. In the future, crowdsourced delivery companies will have to contend with delivery by drones, self-driving cars, and even robots. Yes, robots!

Regarding what caused the outage, while it’s hard to know what went on behind the scenes, it’s worth discussing it, even from an academic standpoint.

The Internet of Things (IoT) has become extremely common in people’s homes during the past two years, to the point where connected devices are now ubiquitous. Who among us doesn’t own at least one of the following connected devices: light switch, outlet, camera, or smart speaker? We know that hackers are continuously scanning our networks to exploit vulnerabilities. Many of these devices were manufactured as a novelty, something that adds convenience to our lives, and not from a security standpoint. I mean, who is thinking about your refrigerator sending out spam emails? However, this exact thing actually happened.

Recently, 25,000 CCTV cameras were hacked to form a botnet to launch a massive DDoS attack. More than 100,000 smart TVs and refrigerators were converted into cyber weapons to send out millions of malicious spam emails. Hackers hijacked printers and set-top-boxes to mine bitcoins.

Can you imagine, how devastating it would be if 100,000 light switches were to suddenly combine forces to concentrate an attack against a company like Amazon, to take down their website?

While I’m not suggesting that Amazon’s website was taken down by hackers, I’m just highlighting a vulnerability that we, as an industry, need to address.

In conclusion, as technology progresses, we are bound to see interesting, new technological solutions to the logistical challenges that online retailers and local distribution centers face.

 

My question for you is, what are your predictions for the future of online shopping?

 

Author: Avrohom Gottheil

 

Amazon Prime Day, Self-Driving Cars, and IoT