Amazon Is Asking Customers To Hand Over Their House Keys

Would you feel comfortable giving Jeff Bezos your house keys? Amazon is hoping that the answer is yes.

The e-commerce behemoth and creator of a global deflation impulse on Wednesday introduced a connected door-lock and security-camera system to let package carriers, guests and dog walkers into your home using an app, WSJ reports. The so-called “Amazon Key” will be available for the bargain price of $25. “This is not an experiment for us,” said Peter Larsen, vice president of delivery technology at Amazon. “We think this is going to be a fundamental way that customers shop with us for years to come."

Of course, one Amazon executive insisted that the key isn’t an experiment: the e-commerce monopolist fully expects this entry process will soon be common features of the homes of Prime customers, giving Amazon direct access to millions of homes. And that’s no accident: The key is essentially Amazon’s coup de grace in its battle to master “the last mile” of delivering packages - a phrase denoting the last leg of a package’s journey as it’s processed, placed on a delivery truck, and spirited to the customer’s door.

As we reported last week, Amazon recently struck a deal with some of the largest landlords in the country to install electronic lockers that delivery people will be able to access for the purposes of dropping off packages. The lockers have a dual purpose: They will help landlords reduce the building staff’s workload (and wages) while also cutting down dramatically on the rate of lost or stolen packages, an area that Amazon has identified as a potentially significant source of cost savings. And, as WSJ points out, in-home delivery is the “next logical step."

As it tinkers with drone delivery and its own delivery service to rival UPS and FedEx, Amazon continues to seek out every competitive advantage it can find as it tries to scale up to take on two entrenched competitors who’ve been pioneers in supply chain logistics. Given the prevalence of smartphones, cutting down on theft appears relatively straightforward.

A consequence of the rise in e-commerce is that “theft is certainly a problem,” said John Haber, who works with retailers on supply-chain issues as chief executive of consultancy Spend Management Experts. Theft is particularly pronounced during the holiday season, when some thieves dubbed “porch pirates” go from door to door stealing gifts.

 

But it remains to be seen whether consumers are ready to open their doors to strangers. Transportation industry experts said that most people are likely to balk at the idea, at least at first.

There is always a risk that customers just might balk at letting complete strangers into their home.

“People have a difficult time letting cleaning people into their house if they haven’t been properly vetted,” said Ivan Hofmann, a former FedEx Corp. executive and transportation-industry consultant. Still, he added, that is how innovation works: “You have to try things that no one else has tried and see what works.”

In the beginning, the Amazon Key system will allow in-home deliveries only from Amazon Logistics, the company’s delivery network. When an Amazon delivery-service provider brings a package to the door, he or she scans the label with a phone before requesting entry to the home.

The system unlocks the door automatically - without a code - and turns on the security camera as the delivery person opens the door and sets the package down inside. After leaving, the delivery person taps the phone again to relock the door.

 

The package recipient gets notifications throughout, including a time-stamped log and the possibility to watch a live video of the delivery or a recording afterward. The recipient can also block the ability to enter the home throughout the process.

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Customers can also use the app to generate codes for guests to enter and will eventually add access for service providers like dog walkers and maids.

The Amazon Key package includes the new Amazon Cloud Cam security camera and a smart-lock made by partner companies. For now, it is only available to Prime members, something the company said helps add value to the $99 annual subscription fee. The service will initially be available in 37 cities starting Nov. 8.

Customers who’ve purchased Amazon’s Alexa personal assistant or Echo speakers should already be comfortable with installing the company’s devices in their homes, WSJ says. But by introducing Key, Amazon risks angering certain business partners, like smart-doorbell maker Ring and smart-door lock maker August Home Inc., which Swedish lock maker Assa Abloy AB signed an agreement to acquire last week.

However,  if Amazon’s track record is any indication, the company’s limitless tolerance to burn money on any growth idea lends it a crucial competitive advantage that could quickly see Amazon Key become a staple in all American homes, meaning that it’s only a matter of time before this tweet becomes reality.

 

AMAZON, 1998: hello we sell books but online

AMAZON, 2023: please return to your Primehouse for your nightly Primemeal, valued Primecitizen

— KRANG ???? NELSON (@KrangTNelson) June 16, 2017

 

With New Patent, Amazon Will Collect As Much Customer Data As Google

A day after Amazon announced it would jump head-long into the bricks-and-mortar grocery business by agreeing to buy Whole Foods Market for $13.4 billion, reports from earlier this week about a new patent issued to the company are starting to make more sense. The patent, which was first reported by the Verge, is for wireless technology that can effectively block customers in Whole Food’s retail locations from “showrooming." "Showrooming" is the practice of using retail locations to test out products before buying them online - a practice that Amazon, by making it easy to comparison shop on a smartphone, helped pioneer.

In its report, the Verge focuses on how the technology will help the company solve a problem that Amazon itself helped create – a problem that has plagued virtually every other traditional retailer.

"Systems and methods for controlling online shopping within a physical store or retailer location are provided. A wireless network connection may be provided to a consumer device at a retailer location on behalf of a retailer, and content requested by the consumer device via the wireless network connection may be identified. Based upon an evaluation of the identified content, a determination may be made that the consumer device is attempting to access information associated with a competitor of the retailer or an item offered for sale by the retailer. At least one control action may then be directed based upon the determination.”

But the technology described in the patent also raises serious concerns about the company’s plans for vastly expanding its capacity to collect and store customers" data. As MarketWatch’s Theresa Poletti reports, with this added capability, Amazon may soon be gathering as much data on its consumers now as Alphabet’s Google Inc.

Stephen DiFranco, an executive-in-residence at the Plug and Play Tech Center in Sunnyvale, Calif., offered a few disturbing hints about the scope of Amazon’s data-collection capabilities in an interview with MarketWatch.

“[The technology] will also triangulate your position in the store, market to you while you are in the store, and understand your behavior in the store,” said DiFranco, who previously worked at Broadcom’s Internet of Things business and led the sale to Cypress Semiconductor CY, -1.72% “If they can collect the same kind of info that they can get while I am surfing on their site, they are going to be able to deliver the same value, the same experience that I get on their site...The company that knows more about the online behavior of me, will now own this same science...while I am in the Whole Foods retail environment.”

 

The positive aspect, he said, is that it will result in better, more convenient shopping experiences for consumers, with their preferences and habits known. It has the ability to turn into a real assistant for shopping. “You passed the milk, you always get milk,” your smartphone may tell you while shopping.

 

DiFranco said that by combining the data Amazon already has about its current customers, plus far more frequent data that comes from grocery shopping, will turn it into an even bigger giant with vastly more data. “This is jet fuel in retail analytics that no one else will have.”

But while some customers might balk at the prospect of shopping in a store where literally every single action and preference is being recorded, investors don"t seem to mind.

Whole Foods’ Market’s largest competitors lost a combined $32 billion in market capitalization yesterday after the announcement. Sell-side analysts have long been calling for a stronger management team to step in and take control of Whole Foods after years of chronically weak earnings and sluggish stock performance. Amazon’s stock also climbed 2.4% on the news, helping it slough off broader weakness in the FAAMG contingent.

Amazon, which already operates a grocery-delivery service in select markets, announced its plans for entering the bricks-and-mortar grocery business late last year when it opened its first small-format grocery store. At the time, the company said it could envision expanding to 2,000 stores. One of the store"s most widely publicized features was its use of automation and AI technology to eliminate check-out lines and allow customers to freely walk out with their purchases. But following the latest revelation about Amazon’s big-data tactics, investors should hope the ecommerce giant also plans to address the more prosaic flaws plaguing Whole Food’s business: Namely, that, as stagnant wages and rising rents force consumers to cut back on spending, the “Whole Paycheck” image will likely continue to alienate shoppers.