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Customer experience, Amazon rises the bar again

The strategy of the distribution giant to improve the customer experience also passes through the smart home. Not only can you now order products through Amazon Echo, but thanks to Ring, Amazon enters your home to deliver the product

15 Mar 2018

After the introduction of Amazon Key and the acquisition of Blink, the Bezos company takes another step towards increasingly secure deliveries when the recipient is unavailable. Now it’s up to Ring, a video security startup whose investors include Richard Branson and American Family Insurance, acquired for a billion dollars.

Blink, acquired in 2017 for 90 million, also provided a remotely managed doorbell and surveillance camera, while Amazon Key is a sort of additional service for Prime customers that enables the deliverer to enter the purchaser’s home.
Ring is, however, a slightly more sophisticated device (the cost of acquisition is self-evident): installed on the front door (like a normal doorbell), equipped with a camera and connected via the internet to the smartphone or other smart devices, it allows the owner to see, at any time and wherever he or she is, who is ringing at the doorstep and, if he or she wants, answer and open. Basically, when someone rings the bell the app opens on the owner’s smartphone, which can see and respond, so, thanks to Ring, it’s like the owner was always at home, with great advantages in terms of home security and monitoring. Since thieves don’t always ring the bell, the device even has movement sensors that alert you when activities within a certain distance are detected. One of Ring’s features is also its ease of use and cost-effectiveness: it can be purchased via the internet and installed without the need for a technician.

What’s behind these acquisitions by Amazon?
Of course, smart home is a new market with enormous potentialities appealing to almost everyone, from big tech companies (Amazon, Google, Apple, etc.) to the newly born startups. The Osservatorio Internet of Things  (Politecnico Milano), has analyzed 163 of them working at a global level, including 124 financed by institutional investors. In total, almost 1.2 billion dollars have been raised in the last three years. In Italy, where things are moving more slowly, the increase between 2016 and 2017 in the smart home market was 35% and reached 250 million euros. These are not yet skyrocketing figures but the market for smart home devices is accelerating.

This is, therefore, a sector where it is possible to be positioned and where the offer and demand for new products is growing. This is obviously a preliminary reason for the latest acquisitions of Amazon, but perhaps not the main one.
There is also a technological reason behind specific acquisitions. In this article Giulio Salvadori, director of the Osservatorio Internet of Things, clarifies that Amazon’s interest in Blink is not only about the possibility of integrating the solution developed by the startup (the video camera) within its wider home offer, but is mainly driven by the technology on which the proprietary chips are based, affordable to be produced and at the same time characterized by very low energy consumption, so much that Blink webcams are not powered by electricity but by battery, guaranteeing a 2-year autonomy. Amazon could therefore use these chips to optimize the energy consumption of its most important devices such as the Cloud Cam and the entire range of Echo speakers, but also for the realization of future devices. This would also greatly improve the Amazon Key service currently available in the US, making it even more convenient and safe.

However, the prevailing reason is likely to be the customer experience. Amazon was founded in 1995 and has never changed its mission to be ‘the largest customer-centric company in the world’. The whole empire of this company is built with this commitment and this focus and results in the obsessive improvement of the customer experience, increasingly seamless, or rather easier and handy from any device (including now Amazon Echo and Dash button), without clutches. If any friction point had been left, it was represented by the deliveries: customers know these are already well organized and accurate, very fast with Prime, but there is still a segment of potential customers to whom where and when to get a purchase delivered, is still something problematic. Problem solved if the Amazon delivery service can directly enter users’ house even if they are not there.
That’s what can be done thanks to Ring, with a level of security and a configuration that probably makes the homeowners feel very comfortable, who still have in their hands the app to open the door to the delivery man.
Amazon shopping experience is getting like a kind of magic: all in all it takes a few painless clicks and anything desired is magically at home.

The customer experience bar is getting higher and higher, a fact that all consumer companies in any sector, including insurance, should be concerned about. In addition, Amazon is entering directly into the insurance business.

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