Amazon has acquired smart-doorbell and home security startup Ring, spokespeople from the companies told Retail Dive on Wednesday. An Amazon spokesperson said the company is not disclosing terms, although a source familiar with the deal has told Reuters that the acquisition is valued at more than $1 billion.
"Ring's home security products and services have delighted customers since day one," the Amazon spokesperson said in an email to Retail Dive. "We're excited to work with this talented team and help them in their mission to keep homes safe and secure."
The tie-up expands a previous partnership with Ring, which Amazon has integrated into its screen-enabled Echo Show to provide video monitoring of the front door of a home and promises to be central to Amazon's Key program, which delivers packages directly into Prime members' homes while they're away.
The investors on ABC's "Shark Tank" show didn't see the potential of Ring, which as "Doorbot" left the show in 2013 without any backing. But Amazon CEO Jeff Bezos sees it differently, and apparently the e-commerce giant values that potential pretty highly, if the rumored $1 billion price tag is true.
That Amazon values the company so highly is a sign that one of the main frictions in online shopping is in the last mile, according to Luke Starbuck, VP of Marketing at customer care automation firm Linc. "Amazon may in fact already have projections on the lift in conversions and spend that more direct and reliable delivery would give them — and perhaps it is far greater than $1 billion."
But these moves could raise privacy concerns going forward and other retailers should pay close attention to Amazon's decisions. "The time to take action on building stronger customer relationships, data profiles and more engaging touchpoints across channels is most definitely now," Starbuck said. "Brands have an opportunity to out-innovate Amazon by connecting with customers directly on a broader range of channels than Amazon offers."
The move also solidifies Amazon's emerging position as a shipping company, which companies like FedEx are dismissing to their peril, according to retail prophet Doug Stephens.
"Amazon is becoming a shipping company, and they're hiding it in plain sight," he said in an email to Retail Dive, noting that the retailer now has its own growing fleet of trucks, on-demand Amazon Flex drivers and a fleet of leased 767F jets. That could add tens of billions to their top line, while saving billions on the bottom line, according to Stephens, who said he believes that within five years Amazon will not only be delivering most of their own packages, but also making deliveries for other small- to medium-sized retailers. And within seven to 10 years, Amazon could put one or more of the major incumbent courier companies out of business.
"The Ring acquisition would be yet another paving stone in a path to solving the last mile problem and one of its biggest contributing costs, the failure to deliver on first attempt, which I understand affects upwards of 60% of deliveries," he said. "With Amazon Key and a Ring doorbell, Amazon Prime shoppers would theoretically never have to miss another delivery."