Monday, January 20, 2014

Amazon Granted Patent for “Anticipatory Shipping”

Amazon has started investigating how they will get your package to your front door even sooner by anticipating potential purchases.  They believe this will greatly reduce shipping time and more importantly make it less necessary to visit brick-and-mortar stores.  They are building a process for boxing and shipping items that Amazon expects customers in a specific region will want.  This is possible by other state of the art technology improvements like previous orders, product searches, wish lists, and cart contents not completely purchased yet.  It even goes as far to understand how much time a potential customer’s cursor has hovered over an item.  A lot of this has to do with the mass amounts of data that Amazon has on their loyal customer base.  I personally can see this working well with items that are bought regularly or are on a subscription for individual customers.  I’m sure Amazon has created a sweet spot of products of certain sizes and shipping standards– I highly doubt large expensive TVs will be anticipatory shipped.  Something that does make sense are books.  Regular buyers that expect a certain author’s new title coming available might be a sure bet they will purchase this book as soon as offered. 

Amazon has dodged criticism that other large distribution companies like Wal-Mart have received in the past.  From a customer standpoint, Amazon has a long linage of customer loyalty – we all buy stuff from Amazon that we have previously looked at in a physical store.  Amazon has between 10 and 20 fulfillment centers, and this this new approach, I believe they will begin to create more localized hubs near major cities or in centralized locations.  Below is an outline of the distribution network that will get items closer to the buyer before the purchase is even made.

In my professional life, I've recently had meetings with a large global shipping company and a large office products distribution company.  As you could imagine, the shipping company is happy to hear the continued movement of goods purchased online for home delivery.  The office products company has told me that Amazon is one of their largest competitors and they continuously monitor Amazon’s product pricing.

As of writing this post, Amazon has declined comment on how it will use the patent.

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