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Despite the article's attempt to establish a connection, Millenials' purchasing habits (online vs showroom) have little to do with this beyond their being the g

by danans 8y ago

Despite the article's attempt to establish a connection, Millenials' purchasing habits (online vs showroom) have little to do with this beyond their being the generation currently creating growth in demand. Large items such as washing machines, ranges, sofas, were always delivered by last-mile delivery companies, regardless of how they were purchased. The real story here is about consolidation and standardization of the last-mile delivery industry. That's a pattern that has occurred in other industries for a long time. The consolidation reduces cost by reducing redundancies (== laying off duplicative employees), and standardization of process and marketing creates a recognizable brand, which reduces purchase friction with customers. This will probably continue until there are a few major nationwide white-glove delivery companies left. And I doubt there will be consumer opposition to preserve the local delivery company the way there is with the local restaurant, boutique, or coffee shop. Appliance/furniture delivery isn't a lifestyle service. Another recent example I discovered: Automobile body repair shops. They used to be mostly independent businesses, but sometime recently, a nationwide corporation called Abra has bought up many independent body shops and turned them into a network.

crimsonalucard 8y ago
One of the side effects of capitalism. Monopolies.
stcredzero 8y ago
A recent example I discovered: Automobile body repair shops. They used to be mostly independent businesses, but sometime recently, a nationwide corporation called Abra has bought up many independent body shops and turned them into a network. Perhaps the conditions for recognizing when an industry "needs" consolidation aren't that esoteric? Aren't they all issues of scaling? Another example is in refrigerated shipping containers. Even though those are specialty items, prices have been driven down in that area to the point where financing the construction of new stock is becoming an impediment to some companies in remaining price competitive. Larger companies which have manufacturing in-house have a huge advantage in that niche. Nationwide chains can spend less per shop on advertising, but still out-compete small shops in terms of advertising exposure. They're also more convenient for other large companies to make deals with. Is last-mile delivery like auto-body, in that the flow of information among consumers isn't so great, and it takes considerable effort for delivery teams to maintain quality of service even though the margins aren't always so great? (Anecdote: I bought a portable dishwasher from Amazon. The UPS driver dropped the box right on the corner, completely smashing the packing and the bottom tray of the machine. I reported the damage and did the return. I got the replacement item and the UPS driver dropped the box on its corner in exactly the same way! I ended up keeping it, since the 2nd time, the water tightness and the cosmetics from the front weren't compromised, then eventually sold it on Craiglist.)
- danans 8y ago
  > Perhaps the conditions for recognizing when an industry "needs" consolidation aren't that esoteric? Aren't they all issues of scaling? I don't think they are esoteric either, but rather, pretty straightforward. Modern communications and information technology have made it possible for a single corporate entity to easily manage an enterprise spread over many disparate geographic locations. As a result, there are costs (basically, people) that can now be reduced because they are redundant, and the remaining people can create some level of standardization in process and branding. This is an old story at this point - at least a few decades old. The only surprising thing is that it took this long for the last-mile white-glove delivery industry to get there. > Is last-mile delivery like auto-body, in that the flow of information among consumers isn't so great, and it takes considerable effort for delivery teams to maintain quality of service even though the margins aren't always so great? Sure, I'm not arguing that they don't have a strong incentive to merge. Quite the opposite, in fact.
walshemj 8y ago
It would be for say AGA stoves but I take your point
- danans 8y ago
  I don't understand your response.
rdiddly 8y ago
Thanks for this; there was something in the logic that bothered me, but I couldn't quite put my finger on it. It was right at the moment when they said people used to buy "bulky goods from local shops and department stores with their own" and then the next word wasn't "vehicles" (i.e. customers' own vehicles) but rather "delivery services" (i.e. stores' own delivery services). Wait, but...

by danans 8y ago

crimsonalucard 8y ago

One of the side effects of capitalism. Monopolies.

stcredzero 8y ago

A recent example I discovered: Automobile body repair shops. They used to be mostly independent businesses, but sometime recently, a nationwide corporation called Abra has bought up many independent body shops and turned them into a network. Perhaps the conditions for recognizing when an industry "needs" consolidation aren't that esoteric? Aren't they all issues of scaling? Another example is in refrigerated shipping containers. Even though those are specialty items, prices have been driven down in that area to the point where financing the construction of new stock is becoming an impediment to some companies in remaining price competitive. Larger companies which have manufacturing in-house have a huge advantage in that niche. Nationwide chains can spend less per shop on advertising, but still out-compete small shops in terms of advertising exposure. They're also more convenient for other large companies to make deals with. Is last-mile delivery like auto-body, in that the flow of information among consumers isn't so great, and it takes considerable effort for delivery teams to maintain quality of service even though the margins aren't always so great? (Anecdote: I bought a portable dishwasher from Amazon. The UPS driver dropped the box right on the corner, completely smashing the packing and the bottom tray of the machine. I reported the damage and did the return. I got the replacement item and the UPS driver dropped the box on its corner in exactly the same way! I ended up keeping it, since the 2nd time, the water tightness and the cosmetics from the front weren't compromised, then eventually sold it on Craiglist.)

danans 8y ago
> Perhaps the conditions for recognizing when an industry "needs" consolidation aren't that esoteric? Aren't they all issues of scaling? I don't think they are esoteric either, but rather, pretty straightforward. Modern communications and information technology have made it possible for a single corporate entity to easily manage an enterprise spread over many disparate geographic locations. As a result, there are costs (basically, people) that can now be reduced because they are redundant, and the remaining people can create some level of standardization in process and branding. This is an old story at this point - at least a few decades old. The only surprising thing is that it took this long for the last-mile white-glove delivery industry to get there. > Is last-mile delivery like auto-body, in that the flow of information among consumers isn't so great, and it takes considerable effort for delivery teams to maintain quality of service even though the margins aren't always so great? Sure, I'm not arguing that they don't have a strong incentive to merge. Quite the opposite, in fact.

walshemj 8y ago

It would be for say AGA stoves but I take your point

danans 8y ago
I don't understand your response.

rdiddly 8y ago

Thanks for this; there was something in the logic that bothered me, but I couldn't quite put my finger on it. It was right at the moment when they said people used to buy "bulky goods from local shops and department stores with their own" and then the next word wasn't "vehicles" (i.e. customers' own vehicles) but rather "delivery services" (i.e. stores' own delivery services). Wait, but...