Amazon: shipping before buying?

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23 January, 2014

Recently, Amazon gained a patent on ‘anticipatory package shipping’, a method to detect the interests of potential customers and to ship the products they might be interested in to them before they have placed an order.

According to Amazon, there is one substantial disadvantage of online shopping: customers cannot receive their items immediately after purchase, but must instead wait for the products to be shipped to them. Also, this shipping may increase the price. “Such delays may dissuade customers from buying items from online merchants, particularly if those items are more readily available locally.” Amazon says in the patent document. To reduce this delay, Amazon developed a method for ‘anticipatory package shipping’. Previously, Amazon also announced that it wanted to use drones to increase delivery times

The method for ‘anticipatory package shipping’ includes packaging one or more items as a package for eventual shipment to a delivery address, selecting a destination geographical area without completely specifying the delivery address at the time of shipment. The exact delivery address might be specified while the package is in transit, for example by using computer systems that communicate with each other as soon as a specific delivery address is available.

According to the patent document, interests of the customer may be detected by analyzing historical buying patterns, for example by analyzing items a customer has bought or browsed. Customer interests may also be detected by analyzing preferences explicitly expressed by the customer, for example through surveys or questionnaires, or by analyzing the customer’s demographic information or any other suitable source of information.

However, when items are shipped to a certain area, but are not actually ordered by the customer, this brings potential costs of returning or redirecting the package.  Amazon found a solution to increase the chance that a potential customer will actually buy the items that are already shipped to his area: the potential returning costs may be offered as a discount to the customer, to induce him to convert the potential interest into an order. In some cases, the package may be delivered to a customer as a gift, Amazon states in the patent document. “If a given customer is particularly valued (e.g. according to past ordering history, appealing demographic profile, etc.) delivering the package to the given customer as a promotional gift may be used to build goodwill.” It is unclear whether Amazon already uses the ‘anticipatory package shipping’ method.

Is Amazon offering a useful service to its customers, or is the company going to far by sending items that are not even ordered yet to customers and trying to persuade them by offering discounts on the products involved?

Source: The Wall Street Journal.

Jonathan Toornstra

Legal Consultant

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