Amazon Delivers Innovation

Amazon Delivers InnovationI came across a Wall Street Journal article recently that caught my eye, an article about Amazon Lockers. The concept is pretty simple. Amazon offers customers in select locations the option of having their package delivered to an Amazon Locker instead of to their street address. When the package arrives they receive an email letting them know where to pick it up along with the code to unlock it, and because most of the lockers are being placed in locations like convenience stores, often the customer can pick up their package 24 hours a day.

This is a great potential innovation for the segment of their customer base that has trouble receiving their packages – either because they live in an apartment or condo that is difficult to deliver to, aren’t home to sign, or because they are worried that their package might be stolen.

But the motive for the experiment is not purely an altruistic customer service one, companies like Amazon pay up to 20% more to have packages delivered to a residence. So, delivering a package to a locker helps Amazon save money too – helping to offset the costs of installing and maintaining the lockers. And as a bonus they serve as OOH (Out Of Home) advertisements in a context where people’s minds are already open to buying things.

So, what did the Wall Street Journal miss?

The Wall Street Journal missed the most important part of this whole idea, and one of the potentially most innovative parts of it. If you’re still missing the hidden golden nugget, one more hint before the reveal – think Amazon Web Services (AWS) including services like EC2 (Elastic Computing Cloud) and S3 (Simple Storage Solution). Now you should see that the real innovation nugget here is that what may look at the outset as a service innovation, is actually a platform innovation.

The same problem that has led Amazon to create the potential innovation that is Amazon Lockers, is a problem for all other online retailers. So, Amazon and their customers definitely benefit from the lockers, but they likely can also be leveraged by any retailer that sells their goods on Amazon. AND, in the future there is no reason that in much the same way that Amazon productized S3 and EC2, Amazon could also productize Amazon Lockers and sell it as a service that any other company can purchase and use.

Package DeliverySo who should have come up with this potential innovation?

FedEx, DHL, UPS, and the US Postal Service all missed this as a potential innovation that any of them should have actually developed. The inspiration for this potential innovation was sitting in full view all along. The US Postal Service installed multiple mailbox solutions in many subdivisions long ago to increase efficiency, and make it so that anyone receiving a package receives a key in their mailbox that opens a larger box in the same unit for package retrieval.

Final Thought

Are Amazon Lockers a good idea? A potential innovation? Yes, I think so. Whether they make the transition from interesting experiment or invention to innovation (through adoption) we will wait and see. But the fact that Amazon is expanding their test is a good sign that the transition from invention to innovation will be made. To close, I would just like to say that Amazon has some other possibilities they could (and likely will) explore, including:

  1. Pursuit of space rent reduction through use of the touch screen to suggest certain products for purchase that the host store might sell.
  2. Show suggested products from Amazon with a ‘send me more info’ button to email the customer more information about a product shown on the screen (to their email or possibly to their phone)
  3. Allow the customer to announce via social media that they’ve just picked up their product
  4. Pick select customers to win a prize based on some kind of points scheme related to their number (or value) of pickups – or just by pure chance – (check door 32 and you might be a winner) – adding an element of fun, mystery, and anticipation to the customer’s package retrieval experience
  5. Allow people to order popular products from what is effectively a kiosk, either for immediate delivery or via Amazon Prime delivery back to the locker in a couple of days

If you missed Amazon’s Innovation Philosophy, it is worth a read.

What else are they saying about 'Stoking Your Innovation Bonfire'

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Braden KelleyBraden Kelley is a popular innovation speaker, embeds innovation across the organization with innovation training, and builds B2B pull marketing strategies that drive increased revenue, visibility and inbound sales leads. He is currently advising an early-stage fashion startup making jewelry for your hair and is the author of Stoking Your Innovation Bonfire from John Wiley & Sons. He tweets from @innovate.

Braden Kelley

Braden Kelley is a Design Thinking, Innovation and Transformation Consultant, a popular innovation speaker and workshop leader, and helps companies use Human-Centered Change™ to beat the 70% change failure rate. He is the author of Charting Change from Palgrave Macmillan and Stoking Your Innovation Bonfire from John Wiley & Sons. Braden has been advising companies since 1996, while living and working in England, Germany, and the United States. Braden earned his MBA from top-rated London Business School. Follow him on Twitter and Linkedin.

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No Comments

  1. antony on August 12, 2012 at 6:03 am

    Another idea, leave things inside locker to be picked up and sold on Amazon.

  2. Stefan on August 13, 2012 at 3:39 am

    I fully agree with the platform idea – which has enormous potential when productizing it in an intelligent way.

    In Germany, Deutsche Post/DHL has established a network of c. 2’500 so called “Packstations” which look pretty similar to amazon’s approach and they even have a loyalty program. https://www.dhl.de/content/de/de/paket/privatkunden/packstation.html

  3. Braden Kelley on August 14, 2012 at 3:38 pm

    Thanks for the link Stefan.

    According to Wikipedia, they’ve been around since 2001.

    https://en.wikipedia.org/wiki/Packstation

    Yet another proof point for the importance of building a Global Sensing Network to help power your innovation efforts.

    https://www.disruptorleague.com/blog/2011/02/22/building-a-global-sensing-network/

    Anyone want help building one?

    Braden
    @innovate

  4. Anssens on August 16, 2012 at 9:54 am

    The problem is that our mailbox are not enought big for some package. Why we don’t increase the size of our mailbox? Or buy specifc and securized mailbox?

  5. david crane on August 19, 2012 at 4:31 pm

    Japanese mom-and-pop shops have provided this service for many years. Amazon is playing catch-up – nothing wrong with that so long as it is not persented as a new idea.

  6. John Wolpert on August 21, 2012 at 2:10 pm

    This is a great article. An actual innovation reported. Lockers is yet another example of how Amazon aggressively changes how it perceives and organizes itself. Constant pivoting off supporting competencies (logistics support online book sales), making them core (logistics core to Lockers), and pivoting again.

  7. bolerioza on October 18, 2012 at 2:55 pm

    I will right away clutch your rss as I can not to find your email subscription
    hyperlink or e-newsletter service. Do you’ve any? Kindly let me understand in order that I may just subscribe. Thanks.

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