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Last Mile Deliveries #3: Ready for Amazon Key?

Here is the previous post on Amazon Key, which begins services on Nov 8 in about 37 cities.

Many are skeptical about the usefulness or the need for the service.  For instance, here is “I’m not ready for Amazon Key” on CNBC, and a dramatic narration (“I’d rather have porch pirates steal my sponges than let Amazon in my house“) of the trust-in-service path point that I made in my previous post on Amazon Key.

Here is a Statista chart capturing the results of a poll: “How comfortable do you feel about guest access via smart locks?” (source: in the chart).

Here is another chart through Morning Consult that gives some additional information on reception to the idea based on the age of the potential customers.

amazon key home delivery survey morning consult

Assuming the poll is generalizable, I think that if a third of the surveyed customers under the age of 30 are comfortable, then it is a great start for Amazon. This skepticism is relatively milder than how Amazon Prime was received. If we rewind to 2005, you may recall the widespread skepticism about the new Amazon Prime idea. (After all, who will pay $79 just for “free-shipping”).  Now, in 2017, an estimated 70+ million customers must on Amazon Prime (based on a back-of-the calculation of the $6.4B retail subscription revenues reported in Amazon 10-K form).

Note that Amazon is not the only e-commerce firm testing delivery of things into your home.  Walmart has been testing (in the Silicon Valley area) direct deliveries to customers’ refrigerators.

This goes to the main point I had made in the previous post. Gaining access to customer homes reduces the last mile time-window mismatch cost mainly by expanding the window available.  If there is an expanded time window to deliver, it becomes easier to design drivers’ routing schedules, which increases labor and fuel usage efficiency cutting the largest variable costs.

Read the previous posts on Last-Mile deliveries (using the tag Last-Mile)

(Post edited for clarity).

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Published in Operations