16 Jan 2014
As every e-commerce retailer knows, shipping out to the customer is one of the largest gaps between online retail and brick and mortar stores. When the customer is absolutely dying to have their product immediately, 99 times out of 100 they're going to visit an actual storefront to make their purchase instead of waiting even the short couple of days that is now standard shipping practice in much of Europe and North America. Better retail prices online aren't always enough to counteract the delays involved in shipping for a demanding customer. But what if customers could have products already shipped and en route to them before they even purchase?
While it sounds like the far-fetched plot of a shipper's science fiction dreams, Amazon has actually applied for - and received - a patent for a process that closely resembles that dream. Known as 'anticipatory shipping', the concept is a combination of the big data shopping and logistics information that only a giant like Amazon can possess, mixed with an in-depth analysis of customer purchasing habits in your area.
The wealth of data that is generated by customer use of the Amazon site is prodigious, and the anticipatory shipping process takes into account almost all of them, including obvious elements such as product searches and wishlists, current and previous shopping-cart contents (whether an actual order was placed or not), to less obvious signifiers such return frequencies and even a heat map of cursor movements around the website.
As it would still be economically unfeasible to complete this anticipatory shipping process for every individual customer, Amazon is instead relying on generalized trends for major metropolitan areas and shipping hubs. Essentially what this does is involve using various areas as temporary warehouses while waiting for the customer to finally click the order button. As warehouse space and logistics personnel are limited in this kind of 'just in time' delivery system, any inventory that's sitting around in a warehouse too long may be offered at a discount or as a promotional item packed in with other purchases.
While Amazon has yet to say whether or not they're actually going to deploy the technique as of yet, the patent filing shows a clear desire to gain a competitive advantage over rivals through the use of big data and some serious number crunching. Expect to see a number of similar revolutionary practices emerge out of the big data trend, but this will be one of the most incredible so far - if it ever sees the light of day.
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