Amazon Key tries to address the biggest problem with ecommerce

Amazon is a modern marvel. No other company in history has made the complexity of finding, buying, and shipping seem so simple. It can get just about anything in the world to your doorstep, much of it in just a couple days or even hours. 

But for all its brilliance, Amazon has had trouble getting past that doorstep. It has perfected everything except for that last foot—call it the Last Foot Problem.

And it is a problem. With people now buying tons of stuff online, including pricey things like electronics and clothes, the theft of packages has become a widespread problem. A 2015 survey found 23 million people reported having packages taken from their doorstep. 

On it's face, this is an immediate problem for consumers, but it's a longer-term problem for Amazon and everyone in ecommerce. If retailers are relying on internet sales for their future, they have to figure out a way to make sure people have absolute confidence that anything and everything they order online will get in their hands.

On Wednesday, Amazon took another shot at solving this problem. Amazon Key is meant to be a secure way for people to let delivery people in through the front door through the combination of internet-connected video cameras and locks. It's the boldest move yet in an attempt to get past the Last Foot Problem, following on other efforts like lockers and immediate pickup. 

Unsurprisingly, not everyone is on board.

It's also not the cheapest option. The Key kit costs $250 and requires that you replace your lock with the one Amazon sends. 

There's some reason to believe this could catch on. Plenty of people may always balk at letting strangers into their homes, but the general idea seems to have become more palatable and widespread in recent years with the advent of companies like Airbnb and Handy, in which letting strangers into your home is just part of the process. 

Even Uber and Lyft seem to be making people more comfortable in dealing with strangers in once-private situations. 

It's not just an Amazon problem. Just about every retail startup in the past few years has relied heavily on shipping packages to people's doorsteps. A slew of startups worth billions of dollars all do the same thing: Stitch Fix, Blue Apron, etc. Heck, even Casper will drop off a new mattress for you to grab when you get home. 

There's even Alfred, a startup that offers to send people to your home to do any number of things, like put away groceries, assemble furniture, and care for pets.

Startups, however, might not care as much. Dayna Grayson, a partner at venture capital firm NEA, said that there's plenty of other problems to solve for ecommerce startups. Amazon's play was more about making sure its customers use its service as much as they can for as long as they can.

"I think for Amazon it is definitely a stickiness play. If they can get the key to your home and build that trust... you're going to keep purchasing from them even more than today," she said.

For Amazon, the Last Foot Problem is similar to the Last Mile Problem—called that because shipping and logistics get more difficult and costly as packages get closer to their destination. Amazon has been working on this as well, with its acquisition of Whole Foods regarded as an effort to improve its physical footprint for fresh goods delivery. 

The Last Mile, however, is a different kind of problem. It's a pure logistics play. The Last Foot is more about trust and intimacy. The delivery person is already at the door. The question is whether there's a system in place that has convinced consumers that opening their door is worth the risk. And for delivery people, there's a question of whether it's worth their risk, too. 

Grayson noted that for a company Amazon's size, solving this problem could also mean good things for profitability—though she said that getting into homes wasn't the only way to do it. Just figuring out how to not have to try to deliver packages multiple times or deal with items sent back due to unsuccessful delivery could make a difference.

"It cuts into their economics quite a bit," she said. "I think there's a number of other ways they can solve this last-foot delivery problem."

Amazon Key could be that system. It could also be the kind of disaster that shows Amazon has its limits. Maybe there's some problems even Amazon can't solve.

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