San Francisco Frontiers - Amazon wants to be everything to everyone

Innovations unveiled in recent days by the Seattle-based tech titan included a delivery van computer system to shave time off deliveries by its speed-obsessed logistics network.

Amazon Stores boss Doug Herrington said that the technology enables vans to recognize stops and signal which packages to drop off.

"When we speed up deliveries, customers shop more," Herrington said.

"For 2024, we're going to have the fastest Prime delivery speeds around the world," he added, referring to Amazon's subscription service.

On top of that, according to Herrington, Amazon last year managed to cut 45 cents off the cost per unit shipped, a huge savings when considering the massive volume of sales.

- Prime is the 'glue' -

Amazon last year recorded profit of more than $30 billion on revenue of $575 billion, powered by its online retail operation and its AWS cloud computing division.

"They have this whole flywheel model with Amazon Prime membership in the middle," said eMarketer analyst Suzy Davidkhanian.

"That's the glue that keeps everything together."

Businesses include retail, advertising, cloud computing and streamed movies and music.

But that very model has the 30-year-old company facing a US government lawsuit, accused of expanding an illegal monopoly and otherwise harming competition.

Amazon makes money from data gathered about consumers, either by targeting ads or through insights into what products they might like, Davidkhanian said.

That was why Amazon paid for expensive rights to stream NFL American football games on Prime Video in a move that promises to help it pinpoint fans of the sport.

Amazon's digital assistant Alexa can order items on command and has been even built into appliances such as washing machines to let them automatically buy supplies like laundry soap as needed.

- A 'pocket pharmacy' -

Amazon showed off enhancements to its virtual health care service called One Medical.

For $9 a month Prime members are promised anytime access to video consultations with health care professionals, along with record keeping and drug prescriptions.

An Amazon Pharmacy takes advantage of the company's delivery network to get prescriptions to patients quickly, striving for speeds of less than 24 hours for 45 percent of customers by the end of next year.

"We're building a pharmacy in your pocket that offers rapid delivery right to your door," Amazon Pharmacy chief Hannah McClellan said, referring to the option of using a smartphone app.

The healthcare market promises to be lucrative for Amazon, which is "trying to be the platform that has everything for everyone," said analyst Davidkhanian.

- Real world wrinkles -

Amazon has suffered setbacks when it comes to brick-and-mortar stores but it continues to strive for a winning strategy.

The company next year will open its first "automated micro warehouse" in Pennsylvania, next to a Whole Foods Market organic grocery shop, the chain it bought in 2017.

People will be able to pick up certain items selected online, with orders filled by robots, after shopping next door for fresh produce and groceries.

Meanwhile, Amazon is ramping up use of artificial intelligence at its online store with tools helping sellers describe and illustrate products.

Product labels will change according to the user, displaying terms likely to catch their attention such as "strawberry flavor" for some and "gluten-free" for others.

"The things that Amazon is doing with AI are to make sure that you go from researching something to making the purchase as quickly as possible," Davidkhanian said.

At the logistics center near Nashville, robotic arms deftly placed packages in carts that autonomously made their way to trucks.

Logistics center automation improves safety and frees up workers for more interesting tasks, according to Amazon robotics manager Julie Mitchell.

However, critics cite delivery speed pressure and other factors as making Amazon warehouses more dangerous than the industry average.

A.Clark--SFF