Amazon's anticipatory shipping: Innovative or insane?by
Move over, drone delivery robots, there’s a new way to cut delivery times. It’s unique, it’s exciting and it’s the talk of the etail town.
All-seeing, all-knowing Amazon was recently granted a patent for anticipatory shipping – basically sending you stuff before you even order it. In essence, Amazon thinks it knows you better than you know yourself. The sad thing is that this may well be true.
Not relying completely on unworldly powers, this kind of technological sixth sense comes courtesy of advanced analytics. The masses of data Amazon collects – think order history, basket contents, wish lists and even how long cursers hover over particular items – could be used to identify your heart’s desire, even though you might not know what that is yet. Your anticipated must-have item could then wing its way to you, only to land on your doormat mere moments after you’ve sealed the inevitable deal.
The news of Amazon’s patent has, as expected and no doubt intended, prompted big discussions within the world of retail and ecommerce. Such a can of worms proved far too much of a temptation so, with the help of a few industry experts, we prised it open.
Hard to please
Ecommerce expert and CEO of Venda, Eric Abensur, predicts anticipatory shipping will be an undeniable, market-dominating triumph. If it isn't for one teeny issue, that is. “If it were indeed possible to accurately predict that a customer will purchase the product they’re searching for, then anticipatory shipping could increase productivity and revenue.” (Note the stonking great ‘if’.) “Unfortunately, the nature of a prediction is that it isn’t an exact science.” Even the mighty Amazon can’t argue with that.
Leon Brits, also from the digital commerce field, sheds some light on why this little snag makes anticipatory shipping a particularly risky game for etailers: “One of the biggest issues online retailers are trying to solve is reducing their returns rates, as the postage cost is often picked up by the retailer and eats into their margins. Anticipatory shipping can only lead to an increase in returns and repackaging, and so doesn’t seem like a fantastic idea.”
Ah, but Amazon has thought of that. In the instance of an item not being ordered, or rejected at the door by the customer, the patent suggests letting them have the item for free, “to build goodwill” (or save on returns, in other words). Such an idea “could be viewed as a radical approach to consumer loyalty, and a significant differentiator,” according to CRM technology guru, Mo Morgan. True - any retailer who gives freebies is going to make friends quickly.
But could this just breed an even more hard-to-please strain of customer? Predictive marketing specialist Paul Gibson thinks it “may train a consumer to browse and not buy, thinking they will get a freebie. And indeed if one doesn't then arrive, they may feel the retailer doesn't appreciate them." Multichannel specialist, Michael Ross, adds: “You may also start getting customers trying to work out what the specific signals are to trigger a delivery and get things deliberately delivered for the discount or freebie.” That’s a good point, considering we’ve all already thought of doing it ourselves.
Would Amazon just be making a rod for its own back then, simply in the name of slightly speedier delivery? “I am all for quick shipping,” asserts Leon, “however, being an Amazon Prime member myself, I am perfectly happy receiving my order the next day. Do we really want delivery drivers turning up at our door like door-to-door salesmen asking: ‘We noticed you added this to your basket, do you want to buy it now?’?”
Leon raises a relevant issue there; the whole concept is a bit Nineteen Eighty-Four. “Retailers must be wary of alienating customers,” agrees Eric. “From a consumer point of view, the idea of having every move you make put under the microscope can be disconcerting and something that could drive shoppers away from your brand.” Paul shares a similar view: "Delivering something someone has not yet purchased could confuse, and maybe even scare off, a potential buyer who may simply be comparing, having already purchased the goods elsewhere.”
Stalky retailers, then, run the risk of sending punters running for the hills – where less-creepy competitors will surely be waiting. However, Mo thinks that if the retailer handles their data carefully, they could increase efficiency and save the customer money. In which case, surely such intrusiveness will be excused by the thrifty consumer as a means to an end. “If Amazon can harness this data with clever algorithms to predict purchase behaviour down to an individual basis, they stand the chance of further reducing costs to their customers. A disruption to the price of some items, particularly those most of us buy regularly, may be enough to influence purchase behaviour. We may find it makes increasing sense to switch some or all of our supermarket shop to Amazon as a result of the effects of anticipatory shipping.”
Loyalty marketer, Susan Binda, agrees that a company which can anticipate what an individual will want to buy in the near future could well poach that custom from other retailers by “almost pre-empting customer’s purchasing patterns.” Susan continues that “by providing this level of convenience, customers are then encouraged to remain loyal.” Not great news for competing companies.
Surely all that’s enough to make High Street retailers break out in a cold sweat; could it be curtains for them? Not necessarily, thanks to impatient consumers and their increasing need for instant gratification: “retailers with high-street presence will still have the edge when it comes to selling items for near-immediate consumption,” Mo thinks.
The biggest question
The biggest question of all though, has to be whether or not Amazon is actually even planning to put this concept into practice; logistics software whizz David Upton notes that “it could just be a PR stunt or an example of patent trolling simply to benefit from royalties.” So, perhaps Amazon is claiming this far-fatched idea as its own, simply to guarantee that no one else can overtake them. Then, when the inevitable logistic advancements happen and other retailers move towards similar strategies, Amazon can sue for breach of their patent.
Mo disagrees with this theory and thinks that anticipatory shipping is, in fact, a viable idea that future technology could support. “I don’t believe Amazon’s patent to be a stunt at all, and I think it’s highly likely they’ll implement a model close to that described.” Susan echoes Mo’s sentiments: “in the future, services such as anticipatory shipping will become the norm and expected by customers.”
The last word comes from ecommerce expert, Eric Abensur, who makes a thought-provoking conclusion. “This move is reflective of a brand trying to cement its dominance in the future. By securing a patent this early, Amazon has protected a hypothetically lucrative enterprise that could fuel further growth for the company. Whether it takes off is irrelevant, because Amazon now owns the space regardless of its success.”