In light of news that Amazon has patented its “anticipatory shipping” concept, the Retail TouchPoints editorial team started to discuss whether it would be a hit or a flop among shoppers. Following are each editor’s individual thoughts:
Debbie Hauss, Editor-In-Chief: As I understand it, there are two ways Amazon could approach this concept: 1) Ship products to a central hub and wait for the orders to come in; and 2) Ship products to customers as a free gift or promotional package. I definitely think that if Amazon has determined that providing loyal customers with an anticipatory shipment of their favorite, or regularly ordered, products will increase loyalty and therefore increase sales, then it’s a phenomenal idea. I’d like to see the business case for it, though. The other option presents more concerns — I think Amazon could end up with a lot of excess inventory sitting around local hubs, which is the problem predictive analytics has been trying to prevent.
Alicia Fiorletta, Senior Editor: I think Amazon’s anticipatory shipping strategy has a lot of potential. As we know, the eTailer is super focused on innovating, and addressing customer wants and needs — even before shoppers indicate they have that specific want or need! In other words, Amazon has proven to be ahead of the curve multiple times. In the area of anticipatory shipping, I think it will be valuable for specific products. For example, it is logical to send sweat socks to exercise enthusiasts on a specific schedule, because they tend to wear them out faster. Same thing goes for cosmetic necessities such as foundation — women typically go through a container every month or two. And of course, diapers. Parents with infants are always in need of diapers. It will be interesting to see how Amazon goes to market with this strategy, and how the eTailer will educate consumers on the benefits. It seems like whenever these new initiatives are unveiled, there’s always initial panic among the masses, especially in regards to customer data security. But if shoppers know how their information will be used, and what the benefits will be for them, it will definitely be a win-win scenario.
Kim Zimmermann, Managing Editor: Predictive analytics are getting better every day, and Amazon holds the crown when it comes to knowing its customers’ buying behaviors, so I’m betting it will be a winner. While they might not always get it right when anticipating what the customer wants, I think they’ll get it right more often than not and have a better shot than most retailers. But there are some challenges when it comes to predicting what products customers want. Target ran into a bit of trouble a while back when it used some buying behaviors to determine if a woman was pregnant and then send her promotions based on that assumption. While they were spot on most of the time, it got them some bad press. Amazon, just because I ordered a Christmas gift for my great nephew doesn’t mean I have a household with kids. You can stop sending me promotions for baby toys. But if you want to put something in my next order for my great nephew, go ahead.
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Brian Anderson, Associate Editor: Out of all the big-name retailers, I would bet on Amazon to be successful with an anticipatory shipping strategy. The company is one of the biggest online retailers in the world, so they have a boat-load of customer data to leverage when deciding what kind of products consumers will be looking for on a regular basis. With more data comes more accurate predictive analytics, which in the end makes-or-breaks how successful an anticipatory shipping strategy will be.
Glenn Taylor, Associate Editor: The ship-from-store concept has existed for the past few years, and has been utilized by many retailers to combat the presence of major pureplays such as Amazon. After some retailers achieved a certain degree of success, Amazon has adopted its own close-shipping concept with a predictive twist. Of course, Amazon has a few years worth of prior purchase data to work with, so it doesn’t surprise me that they have enough confidence in the idea to have it patented. Where it seems to show potential value is in discounts, in which specific regions of the country carry an abundance of a product not as widely available elsewhere. It will be interesting to see how certain products are valued once there is extra inventory, which is an inevitability. It’s not going to be a perfect system, especially in the beginning stages of the launch, but Amazon’s confidence in patenting anticipatory shipping speaks volumes about its vision for the future.
