Amazon optimizes delivery time through anticipatory shipping


Anticipatory shipping When you wanted to buy a CD or a book a couple of years ago, the fastest way to get your new product was going to a shopping mall or the city center and buy it there from a bricks-and-mortar shop. With regard to the time passing betweeen your buying decision and holding the product in your hands, online retailers have still been at a disadvantage. This is changing now with advancing digitalization – especially in the books and music segment.

Nowadays, products in the form of downloads can be bought by and delivered to the end customer instantly; it merely takes seconds before, for example, an e-book appears on your kindle e-reader. But what about other, physical products? Do bricks-and-mortar shops still beat online retailers delivery time-wise? Currently, they certainly do – but for how long?

Exactly this issue just described has been on Amazon’s mind for a while now. After all, no company knows its customers better than Amazon does, so it should be possible to turn this into an important advantage, exploiting its possibility to gather big data on customers to render one of the last pro’s of bricks-and-mortar firms insignificant. Amazon’s answer to this problem has become manifest in a patent that they filed in December 2013; the solution seems to be “anticipatory shipping”. Anticipatory shipping means packaging and sending out a product before a customer even hits the “order now” button. More specifically, products are sent – in advance – to a warehouse in a region where Amazon expects an order according to their internal CRM system, thus optimizing the dispatch route. This way, Amazon wants to leverage its immense knowledge about its customers, so that in some cases where they could be very sure of a future order, they would already completely package a product and put a full address on the parcel before the order is fulfilled. When the order then reaches Amazon’s system, the parcel can be sent out directly and on the shortest possible route, making same-day delivery the norm rather than an exception.

According to Amazon, the technology already works well with very popular products, allowing people to receive items like a new iPhone on its release day. With Amazon’s possibilities to collect data however, it should be possible to extend this opportunity to less popular products. Order histories, product searches, wish list and shopping cart analyses, and even the time your cursor is directed to a certain product – it all helps to make you the ultimately transparent customer. Each click and each order helps to refine your profile and to anticipate your next order.

Until this point, it is not sure whether Amazon will exploit their patent and implement the idea of anticipatory shipping. But if they do, it might be possible that Amazon knows its customers – you – better than they know themselves. How long will it be until a mailman rings at our door before we even hit the order button?

References:

Wall Street Journal: http://blogs.wsj.com/digits/2014/01/17/amazon-wants-to-ship-your-package- before-you-buy-it/

United States Patent and Trademark Office:

http://1.usa.gov/1awfajA

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