April 24, 2018 / 2:51 PM / 3 months ago

UPDATE 1-To beat porch thieves, Amazon slips packages in car trunks

(Adds quotes from analysts)

By Stephen Nellis

April 24 (Reuters) - Not content to stop at slipping packages inside customers' front doors, Amazon.com Inc on Tuesday started a new program to deliver packages to its members' parked cars.

The world's largest online retailer is rolling the program out in 37 U.S. cities for customers with newer compatible vehicles and plans to expand the service. All that is required to have packages delivered to a car is downloading an app from Amazon and linking it to the vehicle's so-called connected car service, such as General Motors Co's OnStar system or Volvo Car Group's On Call service. (Details: www.amazon.com/keyincar)

The in-car delivery effort is part of Amazon's drive to leave packages where they cannot be easily stolen. Since 2011, Amazon has offered secure lockers for urban customers.

"Amazon will keep looking for ways to reduce last mile friction and cost. I'm sure many consumers would prefer to have their car trunk opened remotely by a third party than their front door," said Greg Melich, an analyst at MoffettNathanson.

The in-car service builds on an effort Amazon launched last fall called Amazon Key. That system uses a $220 combination of an internet-connected door lock and camera to allow Amazon delivery drivers to place packages inside the homes of members of Amazon Prime. By contrast, the in-car delivery service is free for Prime members. It will be offered in San Francisco, Seattle, Atlanta, Nashville, Milwaukee, Salt Lake City, Washington, D.C. and other areas.

The in-home delivery option put Amazon in direct competition with so-called smart home security companies such as Alphabet Inc's Nest Labs and presaged Amazon's $1 billion acquisition of connected doorbell maker Ring.

"I think this is a good example of Amazon's test-and-learn culture. The company tries many different things, some are successful, others less so, but all provide important insights for the company," Atlantic Equities analyst James Cordwell said.

But the new in-car delivery service may have broader reach because it works with many compatible cars from Chevrolet, Buick, GMC, Cadillac and Volvo, with plans to deliver to more makes and models in the future.

In a statement, GM said there are at least 7 million owners of compatible GM models. Amazon has not disclosed how many customers have tried its Amazon Key in-home service.

In-car delivery also gives Amazon an in-between option for customers who might want a more secure delivery location than the front porch but do not want delivery people inside their homes.

The Amazon delivery service taps into the car's built-in unlock feature without ever giving the delivery person a pass code or other permanent access to the car.

"Everything is securely encrypted between the two services," said Rohit Shrivastava, Amazon Key's general manager.

Shrivastava also said that Amazon cannot see or track the customer's car; instead, the customer gives Amazon an address where the car will be parked and publicly accessible, along with the make, model, color and license plate number to help the delivery person find the right car. Customers also get several reminders on their phones before, during and after the packages are delivered.

Reporting by Stephen Nellis in San Francisco and Arjun Panchadar in Bengaluru; Editing by Greg Mitchell and Lisa Shumaker

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