Alberto Mingardi  

Amazon's crystal ball

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Amazon has already revolutionized the delivery of many goods, but may still have some surprises in store.
The Wall Street Journal Digits blog reported that the Seattle-based company has patented the so-called "anticipatory shipping," a method to start delivering packages even before customers click "buy."

The new approach could cut delivery times and discourage consumers from visiting physical stores. In the patent document, Amazon says delays between ordering and receiving purchases "may dissuade customers from buying items from online merchants."
So Amazon says it may box and ship products it expects customers in a specific area will want - based on previous orders and other factors - but haven't yet ordered. According to the patent, the packages could wait at the shippers' hubs or on trucks until an order arrives.
In deciding what to ship, Amazon said it may consider previous orders, product searches, wish lists, shopping-cart contents, returns and even how long an Internet user's cursor hovers over an item.

Now, if I do understand this correctly, this is nothing but bringing to a level of superior refinement a very old idea. Notice that nobody will receive anything she didn't order: it is just that Amazon will locate stuff nearer to customers it estimates will buy it.
Getting closer to customers with the goods they may demand is the whole business of distributing goods. Book distributors always used to order the book of a certain author or of a certain publishing line in numbers that were dependent on how well the same book, or the same series of books, did sell in the past. But of course this was a vague approximation: just very careful observers of the editorial market could venture serious forecasts on the potential sale of a book, based upon a variety of factors that, indeed, include the author's name, but also the sale of similar books in the same period, the design of the cover, the price tag, et cetera. Booksellers may "bet" on a title, because they know their customers, but the amount of information at their disposal was pretty limited. Now Amazon aims at doing roughly the same - but using a much larger pool of information.
On the one hand, this looks to me like quintessential Amazon. Some of Amazon's most amazing successes are based on a very similar logic: i.e., "upgrading" for a new era some long-existing features of the publishing (or the distribution) industry. The most obvious example is "Look Inside", a feature that clearly mimics what we all do, while browsing the shelves of real-world bookstores, before making our choices.
On the other hand, is such an idea really worth a patent? Is that genuinely novel, useful, and not obvious? The devil may be in the details of technological sophistication, but I'd like to have the opinion of some IP experts among the readers of this blog.


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CATEGORIES: Economics and Culture



COMMENTS (3 to date)

Talk about the old being new again! This is a return to retailing the way McKesson-Robbins and Avon used to work.

Brad Strang writes:

As if UPS and FedEx are going to stage trailers of product in their yards without valid ship-to locations? Positioning product at certain localized geographic Amazon DC's is one thing, but it is not "anticipatory shipping".

Essen writes:

Amazon should be mindful of the third part of Reagan's comment:

Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it.

A suggestion for distribution of books is this:
Build a printing and binding station in each locality. As soon as an order is received, an ebook format of the book is forwarded to the nearest station. ebook is auto converted to a hardbound. EOD, all ebooks converted into hardbound are physically shipped to customers in the locality. Licenses, as applicable, will have to be taken, of course.

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