Game-Changing Amazon Updates: Faster Delivery Speeds, AI Checkout, and More
Amazon is launching game-changing updates that could transform your business.
From cutting-edge AI in checkout technology to expanded delivery options that could reshape how you fulfill orders, these changes are set to make a big impact.
Whether it’s the introduction of faster same-day delivery for Prime members in Canada, a pilot program for one-hour delivery in the UK, or the mandatory home collection for heavy item returns, Amazon is pushing boundaries to enhance the shopping experience. And for those looking to grow their business across Europe, the automatic enrollment of more ASINs into Pan-European FBA could be a game-changer.
With these updates, understanding how they could affect your business operations is crucial. So, keep reading to find out see how these updates could streamline your operations and give you a competitive edge.
Amazon Just Walk Out Technology Gets Smarter
Amazon’s Just Walk Out self-scan technology is about to receive a major AI upgrade, poised to revolutionize the way retailers handle customer transactions. This advanced AI model is designed to make the system more accurate, efficient, and less costly to implement, which is a potential game-changer for retailers considering this technology.
How the AI Upgrade Works
The new AI model improves the system’s ability to handle complex shopping scenarios, such as camera obstructions, varying lighting conditions, and the presence of other shoppers. These enhancements mean that Just Walk Out (JWO) can now accurately identify products, even in challenging situations, like when a customer grabs two identical items at once. This level of precision is crucial for maintaining customer trust and ensuring that transactions are processed smoothly.
Fewer Fixtures, Faster Sales
For retailers, the most significant advantage of this upgrade is the potential reduction in costs.
By requiring fewer hardware fixtures, the technology becomes more affordable, making it a more attractive option for a broader range of retailers. This is especially relevant in environments like stadiums, airports, and hospitals, where quick and efficient service is essential. Retailers in these sectors could see improved customer satisfaction and increased sales by minimizing wait times and streamlining the checkout process.
The Competitive Landscape
Despite these advancements, many convenience and grocery retailers have been hesitant to adopt JWO at scale due to high implementation costs and data privacy concerns.
Recently, Amazon has scaled back its use of JWO in the US, opting instead for Dash Cart, a smart shopping cart which features an integrated weighing scale, barcode scanner, visual AI camera, and geo-fencing capabilities. In contrast, Netto, in collaboration with Trigo, has launched the largest frictionless grocery store in Europe.
However, Amazon’s JWO AI upgrade could change this dynamic by lowering the entry barrier and offering a better return on investment. As the system processes more data and becomes even more accurate, it may become a more compelling option for retailers who have so far opted for cheaper alternatives.
Amazon’s focus is shifting from its own retail stores to third-party venues, where Just Walk Out is finding success. For example, stadiums like Seattle’s T-Mobile Park and airports operated by Hudson are already benefiting from the technology.
According to Jon Jenkins, VP, JWO technology, Amazon has plans to double the number of third-party stores equipped with Just Walk Out this year, thereby positioning JWO as a solution for venues that need fast, reliable service around the clock.
What’s Next
In addition to the AI upgrade, Amazon is also introducing an RFID-powered checkout system for stores where customers prefer a more traditional shopping experience, like clothing and merchandise shops. This expansion into new types of retail environments shows Amazon’s commitment to staying at the forefront of checkout technology.
As Just Walk Out technology advances, its enhanced accuracy and efficiency are poised to make it a more attractive solution for a broader spectrum of retailers. For retailers, keeping up with these innovations is crucial—embracing this technology could offer a significant competitive advantage in today’s rapidly digitizing market.
Related: Amazon Warehouse Automation Increases Concerns over Job Loss and Product Selection Inaccuracy, AI and Automation
Amazon’s Same-Day Delivery Push: Challenges and Opportunities for Sellers
Amazon has ramped up its focus on same-day deliveries, a move that aims to bolster its competitive advantage over Walmart.
In 2024, Amazon has already delivered over 5 billion items globally within a day, marking a more than 30% increase from the previous year. In the US, almost 60% of Prime orders in the top 60 metropolitan areas arrived within a day in Q1 of this year, a significant rise from about 50% in early 2023. Amazon offers over 300 million items with free Prime shipping, with tens of millions available for same-day or next-day delivery. This represents a dramatic increase in the number of products eligible for expedited shipping since Prime’s launch in 2005.
This impressive feat highlights Amazon’s commitment to making rapid delivery the new standard.
Outpacing Walmart and Target with Same-Day Speed
The push for same-day delivery also comes amid heightened competition. Rivals like Walmart and Target are enhancing their delivery capabilities, with Walmart offering deliveries as fast as 30 minutes and Target introducing a loyalty program for same-day delivery on orders over $35.
Amazon’s investment in speedy shipping is a direct response to these competitive pressures, aiming to maintain its dominance in the market by meeting consumer expectations for faster delivery. The company’s reorganization of its logistics network into regional hubs has not only sped up deliveries but also reduced costs, achieving a drop in the cost per unit to serve.
How Amazon is Reinventing Fast Delivery
To stay ahead of consumer demands and outpace its rivals, Amazon is honing in on several strategic initiatives:
1. Centralized Same-Day Options
Amazon is consolidating all same-day delivery items into a dedicated “Same Day Store” page, making it easier for customers to find and purchase products that can be delivered within hours. Amazon’s strategy includes consolidating all same-day delivery items into a dedicated “Same Day Store” page, making it easier for customers to find and purchase products that can be delivered within hours.
2. Expanded Delivery Reach
The retailer plans to double the number of same-day delivery facilities in the US in the coming years. These facilities, averaging 100,000 square feet, focus on high-demand items in major metro areas.
As of this writing, Amazon Same-Day delivery is available in more than 120 US metro areas, such as Atlanta, Boston, and New York City, as well as smaller locales like Baton Rouge and Cedar Rapids, ensuring faster delivery to a broader range of customers. By consolidating the fulfillment process, Amazon reduces the number of stops a package makes, which cuts costs and improves efficiency.
3. Same-Day and Overnight Delivery in Canada
Aside from the US, the ecomm giant is also introducing enhanced Same-Day and new Overnight Delivery options for Prime members in Canada. This initiative, now available in the Greater Toronto Area, Southwestern Ontario, and Metro Vancouver, marks a significant step forward in the company’s ongoing quest to offer unparalleled convenience to its Prime members.
Prime members in the targeted regions can now enjoy Same-Day Delivery with a quick turnaround time of as little as seven hours. By selecting the new delivery window of 5PM to 10PM at checkout, customers can have their orders delivered by late evening the same day.
Additionally, Amazon has introduced new overnight delivery options, allowing orders placed by midnight to arrive the following morning, with delivery windows from 4AM to 8AM or 7AM to 11AM. This new service aims to cater to urgent needs such as last-minute gifts or travel essentials. Items eligible for this service are marked as “Prime Overnight” in search results and on product detail pages.
4. Broadened Retail Partnerships
Amazon is teaming up with a growing roster of retailers, including Sur La Table, GNC, Fabletics, PacSun, and Office Depot, to diversify its product offerings.
These steps are designed to not only meet evolving consumer expectations but also to keep Amazon at the forefront of the online retail landscape.
Impact on Sellers
For sellers, this expansion has both positive and challenging implications. On one hand, increased visibility and faster delivery can drive higher sales volumes and enhance customer satisfaction. Amazon’s data indicates that consumers tend to spend more and shop more frequently when one-day shipping is available, as supported by RBC Capital Markets.
On the other hand, sellers may face increased pressure and operational costs to meet Amazon’s rapid delivery requirements. This could necessitate adjustments in inventory management and fulfillment processes to keep pace with Amazon’s heightened standards.
For instance, some sellers may need to invest in more advanced fulfillment capabilities or partner with local distribution centers to meet the demand for rapid delivery. Smaller sellers might particularly struggle with the logistical demands and costs associated with meeting the same-day delivery promise.
Related: Amazon’s New On-Time Delivery and Shipping Policy: A Mixed Bag for FBM Sellers
Overall, Amazon’s commitment to same-day delivery represents a major shift in its logistics strategy, aiming to offer even faster service to its customers. While this move can benefit sellers by increasing their potential sales and visibility, it also brings challenges in terms of meeting Amazon’s expedited delivery standards.
Amazon Requires Home Collection for Heavy and Bulky Product Returns
Starting August 30th, Amazon will require sellers to offer home collection for returns of heavy and bulky items. This update affects items that weigh 31.5 kg (about 70 lbs) or more, or those with a longest side exceeding 175 cm (about 69 inches). The change is aimed at improving the returns experience for customers purchasing such items from seller-fulfilled listings.
How It Works
- Home Collection Requirement: Provide a home collection service for returns of qualifying heavy and bulky items. This means arranging for a carrier to pick up the item directly from the customer’s location.
- Tracking and Communication: Authorize or deny return requests within 48 hours. Once authorized, they must notify the customer via Buyer-Seller Messages, provide the estimated collection time, and upload the prepaid return label and tracking ID.
- Collection Process: Arrange and ensure the collection is completed within three attempts based on the scheduled time provided to the customer.
- Alternative Options: Consider offering a partial refund or replacement part instead of arranging a home collection, provided the customer agrees. In such cases, you must update the return request with the new tracking ID and use the reason code “Return request cancelled.”
How this Might Impact Your Business
- Higher Operational Costs: For some sellers, especially those with fixed-location carrier contracts, arranging home collections can be complex and costly. The expense of ad hoc collections from remote addresses may exceed the original shipping costs, potentially impacting profitability.
- Carrier Contracts: Review your carrier agreements to ensure that home collection services are included. Updating contracts or negotiating new terms may be necessary to comply with Amazon’s new requirement.
- Risk of Damage: A few sellers expressed apprehension about the risk of items being damaged during return transit. They are worried about taking on the financial risk for returns due to buyer remorse or accidental orders, particularly if the item is damaged upon return. Currently, customers are responsible for ensuring the safe return of items, but this policy shift places more risk on sellers.
- Customer Expectations: Some sellers question whether the new policy aligns with customer expectations. Historically, customers have not expected home collection services for bulky items, and this change might set a new precedent that could lead to increased return rates and further complications.
- Operational Challenges: The logistics of arranging collections can be cumbersome. Coordinating collection times that fit customer schedules, handling missed appointments, and managing multiple collection attempts can be challenging. Some sellers worry that this will lead to more disputes and A-to-Z Guarantee claims, where customers might exploit the policy to get free returns.
- Compliance: Adhere to strict timelines for authorizing returns and communicating with customers. Efficiently managing these requirements will be crucial to avoid unnecessary A-to-Z Guarantee claims and maintain a good order defect rate.
Amazon’s Response
Amazon acknowledges the concerns and has clarified that sellers can deduct the cost of return shipping, including home collection, from the refund if the return is the customer’s responsibility. However, issues such as damaged returns and the suitability of messages like “Return Request Cancelled” are still points of contention among sellers.
In sum, while the new home collection requirement may align with Amazon’s goal to enhance customer satisfaction for large-item purchasespresent, it presents logistical and financial challenges for sellers. You will need to adapt their processes and possibly renegotiate carrier terms to meet these new standards effectively.
Go to Manage Returns to learn more about this new requirement.
Related: Amazon’s Reimbursement Policy Updates: What Sellers Need to Know, Tips to Improve Customer Experience and Reduce Returns
Amazon Expands Pan-European FBA Enrollment
Amazon is simplifying the process for sellers to expand their business across Europe by making more ASINs eligible for automatic enrollment in Pan-European Fulfillment by Amazon (Pan-EU FBA).
Effective July 1, 2024, this update aims to streamline access to Amazon’s Pan-EU FBA network, which allows sellers to reach customers across multiple European countries using a single inventory pool.
What Changed
Previously, to qualify for Pan-EU FBA, sellers needed to have active product listings in four (4) Amazon European stores—Germany, France, Italy, and Spain—and maintain inventory placement in at least two (2) of these countries. This requirement posed challenges for many sellers, especially those with listings impacted by local language requirements, restricted products, or blocked accounts.
With the new update, sellers will be exempt from the requirement to have active listings in all 4 stores if their listings are inactive due to these issues. Instead, ASINs will be automatically enrolled in Pan-EU FBA as long as the seller maintains active listings and inventory in at least 2 of the specified countries.
What to Expect
- Increased Accessibility: The new policy lowers the barrier to entry for Pan-EU FBA, allowing more ASINs to benefit from Amazon’s European fulfillment network. This change will enable sellers to reach a broader European audience more easily, without the need to ensure active listings in every targeted country.
- Simplified Management: By automatically enrolling eligible ASINs, sellers can avoid the administrative burden of managing listings across multiple countries to qualify for Pan-EU FBA. This streamlining can save time and reduce complexity in managing inventory and sales across Europe.
- Grace Period for Reactivation: For ASINs that are exempt from listing requirements, Amazon will provide a grace period allowing sellers time to reactivate these listings. Initially, this grace period will be unlimited, giving sellers flexibility, though it will eventually be time-restricted. Sellers will receive notifications at least 30 days before any changes to the grace period duration.
- Local Fulfillment Fees: Enrolled ASINs will incur local Pan-EU FBA fulfillment fees based on the store where the product is listed and has inventory. Sellers will need to manage these fees according to the specific requirements of each European market.
Amazon’s move to automatically enroll more ASINs in Pan-European FBA represents a huge opportunity for sellers to enhance their reach across Europe with greater ease. While the updated policy reduces some of the previous requirements and complexities, sellers should remain attentive to changes in grace period durations and manage their ASINs and inventory placements strategically to fully leverage this expanded access.For further details on eligibility and grace periods, visit the Pan-European FBA ASIN enrollment page.
Related: 6 Expert Strategies for Expansion in Amazon Europe, Unlocking European Ecommerce: A Comprehensive Guide to Global Ecommerce for US Sellers, GPSR: What EU Sellers Need to Know and Implement Before December Deadline
New Tools for Tracking Voice of the Customer Performance and Feedback
Amazon has recently upgraded its Voice of the Customer dashboard, offering sellers new ways to track product performance and access feedback in multiple languages. These updates aim to provide more actionable insights for improving product quality and customer satisfaction.
New Features and How They Work
- Performance Benchmarks: The updated dashboard now includes metrics such as the Negative Customer Experience (NCX) review rate and NCX return rate. These indicators show how a seller’s product review and return rates compare to industry benchmarks. By monitoring these metrics, sellers can track performance trends over time and make data-driven decisions to enhance product quality.
- Frequent Returns Badge: A new badge has been introduced under the Action column, highlighting frequently returned items. This feature provides detailed feedback on why items are being returned, enabling sellers to address common issues and reduce return rates.
- Multilingual Feedback: Previously available only in English, customer feedback can now be read in multiple languages. This enhancement allows sellers to better understand and address concerns from a diverse customer base.
Seller Reactions and Implications
These updates are designed to improve transparency and support sellers, but the feedback from the seller community has been mixed. Some sellers appreciate the added functionality, noting that the ability to track performance benchmarks and view feedback in multiple languages can be valuable for refining their offerings.
However, there are concerns about the effectiveness of these tools. One seller expressed frustration with the Voice of the Customer system, suggesting that it often fails to address specific issues related to product quality or return reasons. They proposed a “Voice of Seller” feature, similar to eBay’s system, which would allow sellers to block problematic buyers and address abuse more effectively.
The seller argues that the current feedback system does not adequately consider the challenges faced by sellers, such as dealing with fake return reasons or abusive chargebacks. They advocate for a more balanced approach that includes better protection for sellers and a clearer process for resolving disputes.
Related: Mastering Ecommerce Marketplace Management: A Guide to Cross-Marketplace Control and Monitoring, Monitor Your Amazon Listings and Competitors 24/7
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