Problem

Delivery insecurity is a problem. Importantly, it’s a problem we share with our customers. Even as we continue to improve delivery efficiency within our fulfillment pipeline, we still face the twin challenges of delivery inaccuracy and ‘porch piracy’ interfering with the primary goal of the Amazon delivery service to “deliver items to the customer as quickly, secure, and safe while minimizing company costs”. 

Economists have calculated the value of the problem to be in excess of $9B in 2020 in the United alone and, with Amazon sales on track to be up 15% YOY, that cost is likely increasing. Independent surveys identify that 43% of Americans have experienced package theft at least once, and 61% said that it had happened to someone they know. Internally, surveys show that package theft was the number one concern of over 30% of Amazon customers and a major factor when choosing to purchase online or in-store. The data bear out common sense that anxiety about delivery security increases in direct correlation with the value of the purchased item. Survey results vary on the impact that delivery inaccuracy and package theft have on Amazon’s overall ‘trustworthiness’. Most importantly, though, delivery security is central to the customer experience as “we strive to offer our customers the lowest possible prices, the best available selection, and the utmost convenience”. 

The average cost of lost or stolen items replaced through Amazon’s A to Z Guarantee is $109. But whether lost or stolen, the cost of missing packages is not just the goods themselves. Misdirected and stolen items are a significant driver of customer service contact and represent a significant portion of the highest cost and most difficult to resolve customer service enquiries. Just as, in his final Letter to Shareholders as CEO, Jeff Bezos outlined the $126B of value created for Prime Members through time saved each year, so we must calculate the value of customers’ time spent looking for misplaced parcels; investigating their losses; and in contact with customer service. These tasks take customers an average of 1.3 hours per incident representing, by the same conservative metrics, more than $590M of value lost per year. Even when replaced by the Amazon or Third-Party Sellers driven by ratings and reviews, it is worth being clear that many of these hours still end in a result considered ‘unsatisfactory’ by the customer, damaging sentiment and retention. 

Of course, re-supplying items also comes with additional fulfillment costs, exacerbated by the problem occurring as part of the ‘last mile’ logistics. As much as we automate and find new efficiencies through innovation, having to double the direct costs of a purchase drastically eats into the profit of any sale. It is also worth noting the negative impacts on our Climate Pledge. Unnecessary additional deliveries are not assisting with our goal of achieving net zero by 2040 and transportation impacts are already the most difficult challenge in that strategy. Likewise, while Amazon cannot be held responsible for nefarious acts by others, and even as many thefts go unreported due to the low value of the loss or the perception that there is nothing that can or will be done, responsible corporate citizenship behoves us to also acknowledge the increased impact that porch piracy has on the police and broader justice system. 

With more than $15M of value lost per day inside the Amazon network, the time is right to invest in finding a solution. To analyse and tackle the problem, we formed a small team with skills and experience in finance; design thinking; UX; retail; communications; and getting to market. 

Amazon’s mission is “the lowest possible prices, the best available selection, and the utmost convenience (Post)”. Amazon can provide convenience to their customers by ensuring the delivery process with the confidence of receiving the products. Both Amazon Friends and our hardware proposal have the customer as the center of the delivery process, offering peace of mind while decreasing porch piracy. Most importantly, Amazon is a technological company with experience in devices including Alexa or Ring. Both solutions are tight to the critical resources of Amazon, which are their marketplace or App and their experience in devices. In addition, the focus on Amazon Prime members will facilitate the positioning of this solution tight to the strong brand recognition and loyalty from the customers.

Sponsors and team: We need Tom Szkutak, CFO, and Jeffrey Wilke, CEO of Worldwide Consumer, to sponsor this project. The team members will come from Amazon devices, digital management, and worldwide operations, following our two-pizza rule.

Partners: The most important partner outside Amazon capabilities is Tile. This company offers trackers using Bluetooth technology to locate lost things from the owner of the trackers (Pocket). Our proposal is leveraging an exclusive partnership with this company to develop a tracker to add in the package of the Amazon Prime members who already have a tracker in their apartment to pair both sensors and activate a package location and security system.

Amazon Beepr is a uniquely identified, Bluetooth-enabled tracking device included in Amazon Prime packages that offers live location data throughout the entire delivery process, including after a package has been dropped off. Much like a Tile or Apple Air Tag, Beepr can keep track of a package wherever it is in the delivery chain and even after it has been delivered. 

Before it leaves the warehouse, an Amazon Partner inserts a Beepr into the box containing a Prime customer’s order. The Beepr’s unique ID is automatically added to the order details and appears in the customer’s Amazon app. Using the existing network of Bluetooth-connected devices in warehouses and delivery vehicles and Amazon apps on driver’s and customer’s phones, the package’s location is tracked and updated in real time, rather than when scanned at different checkpoints. When scanned at its final delivery destination, customers can see exactly where the package was delivered thanks to the highly accurate location services on the driver’s handheld device. 

Rather than just a tracker, though, Beepr is designed to be part of an anti-theft and delivery accuracy network, connecting to devices to ensure it’s delivered to the correct location and that only the customer can move it from that location. 

• Working as a contactless digital signature, in-app Bluetooth connection will allow verified customers to formally accept in person delivery and ensure no-one else can ‘sign’ for valuable items. 

• Working as a digital doorman, Beepr Home Station and Ring devices can connect to Beepr to accept a package to the correct location, ensuring delivery accuracy with delivery not fulfilled until the local connection is made. 

• Working as a security system using existing and dedicated Ring devices, Beepr can activate its own audio alarm as well as speakers in Chime devices, video and audio doorbells, Wi-Fi speakers and nearby phones to sound an alarm if a package is moved after delivery by anyone other than the customer, drawing immediate attention to the theft and continuing to sound until deactivated by the customer. The alarm is designed to be immediate, piercing and attention grabbing, with the option to use custom sounds like a police siren or barking dog. 

In addition to the in-parcel tracker, Beepr relies on a Bluetooth enabled delivery-side device, whether a mobile phone, an integrated security device like Ring, or a Chime product. To facilitate testing and uptake of the system, the team has developed Beepr Home Base, a low-cost, battery-operated sensor device that can be delivered and installed for under $20. Factoring in giving away a significant number of Home Base devices for the pilot, we anticipate the pilot total cost to be approximately $1,400,000. 

Essentially, Beepr is designed to create a digital ‘hand off’ as proof of accurate delivery, as well as assisting navigation and successful fulfilment, while also a deterrent against opportunistic theft. Working together, existing Bluetooth enabled products create an ever-growing location services mesh for locating packages during and after delivery. In doing so, Beepr creates a network to share the responsibility for package security, shifting the onus of local (at premises) security to the receiver – not Amazon – by providing affordable resources and choice. While we would suggest keeping the Beepr pilot programme outside the Ring brand ecosystem to begin with, longer-term we anticipate the network-wide rollout of Beepr as a feature for customers who want it and integration with Ring in the future, would include the ongoing benefits of behavioural data, subscription revenue, and increased loyalty of Ring and Prime customers. Indeed, the team would suggest inviting Ring customers in the selected city to join the Beepr pilot, adding a free-of-charge update to their systems alongside the rollout of standalone Beepr Home Base giveaways and sales. 

Importantly, Beepr trackers are designed to be re-used, with customers given the choice of how to return them to Amazon whether sent or dropped off to automated return stations at Whole Foods, Amazon Lockers, and other convenient high- traffic locations. Moving forward, Beeprs could be accessed as a once-off security measure chosen by customers during checkout, paid for by a deposit and return system for Prime customers, or accessed via a subscription model that allowed a customer to have a limited number of Beeprs out of the warehouse at any one time. Third-Party Sellers could also offer added Beepr security as a sales promotion, absorbing or sharing the cost with the customer. 

Amazon Beepr offers many opportunities for iteration and improvement as lessons are learned from development and the pilot programme. Beepr would be disposable after a 12 month use life for the pilot but we would expect to iterate towards rechargeable (or at least replaceable) batteries and a more automated system for a mass rollout. Likewise, Beepr is designed using affordable low-power Bluetooth 4 communication but, as more devices switch to the new protocols, we would hope to transition to the advantages of Ultra-Wide Band radio technology used by current release Apple and Samsung products. 

Looking further into the future, Beepr represents the vanguard of a new standard of tracking and data collection for enhanced delivery. Delivery locations can come to rely on digitally connected, physical location data, rather than building addresses, allowing in turn for major advancements in AI efficiency planning and automation. AR could be used to guide delivery partners to exactly the right door or locker, without their need to navigate from outmoded mapping or wayfinding such as street signs or building directories. Indeed, Beepr is a gateway to a next generation or delivery planning, tracking and fulfillment throughout the entire Amazon network, as well as mapping and navigating built environments for future automated delivery systems. 

Technology - By creating innovative solutions designed to fit the needs and get the job done ranging from hardwares, services, and platforms.

Resources - Our network of resources from diversified industries will allow us to build a strong foundation and leverage our competitive advantage.

User Experience - By developing unique solutions that are focused to our user experience, we will capture a long term customer value and sustain competitive advantage.

Specialization - Our goal is to change the world by creating the safest package delivery service on the planet with specialized products and services that are integrated to the lives of our customers.

Tactical strategies - By deploying our brand advertising,  promotions, and tier membership pricing, we will improve our market share, customer service, and competitive pricing that will give Amazon a competitive advantage.

Amazon Prime has 151 million customers[i]. Prime members received an average of 51 orders per year, with an annual average total spend per member of 1,400 USD. Based on a survey from Statista, 58% of Prime members confirm that they decide to purchase based on time and delivery conditions[ii]. Being Amazon's prime critical customers for the company, the project team has decided to focus on prime members of San Francisco, a total of 393,750. We are planning a six-month pilot to identify the advantages and opportunities of both strategies from Amazon Friends and Beepr. We plan to enroll a total of 15% Prime members by the end of the pilot. In addition, we will create a focused campaign for building owners or building managers with at least 50% of Amazon Prime members to encourage the use of both services. The budget projections for this project are as follows: