Amazon: How Do They Really Do It? (2022) Movie Script

It delivers to 100 countries,
ships 400 items every second,
and is worth a staggering
$1.7 trillion.
It can only be Amazon.
It is growing at a rate almost
unheard of for a company that size.
Amazon's become so big
that their revenue dwarfs
the GDP of some countries,
like Portugal.
In this program me, the story
of how it's all happened...
...told by the people who were there.
From one of the first employees...
It was dizzying to be a passenger
in this juggernaut. the brains behind
world-changing inventions like Prime...
There was a lot of fear that this
would have disastrous effects.
...and this little thing.
AMAZON ALEXA: I was made to play
music, answer questions and be useful.
I worked on the grandmother
of Alexa.
Plus, we discover the secrets
behind its mind-boggling operation.
From how it runs its warehouses...
They want you to pick these items
in less than seven seconds.
We trusted computers
to make all the decisions. how it exploits
our personal information.
We actually did not
think about it as manipulation.
To the ruthless tactics it uses
to destroy its rivals.
They would pricecut these companies
into submission.
We'll get the inside track
on getting the best deals...
When it comes to saving money
on Amazon,
there's a few cunning little tricks
you can try.
There's websites within it
that actually, the prices
could be up to 90% cheaper.
...and delve into the archives
to hear from the entrepreneur
behind it all,
Jeff Bezos, the world's richest man.
Well, was actually
profitable in December 1995.
It must have been for,
oh, about one hour.
Join us as we go Inside Amazon.
OK, so first, a question.
How many times have you shopped
on Amazon this week?
Chances are, quite a few.
Nine out of ten of us shop there.
And for most of us, it's the first
retail site we click on.
And is it any wonder?
By one estimate, Amazon sells
over 600 million products
on its website.
Massive choice? Tick.
And then there's that delivery time.
Two days, one day, same day.
Mind-boggling, isn't it?
Want to know how they do it?
Well, have a look in here.
These warehouses are the beating
heart of the Amazon operation.
And if you're overwhelmed,
don't worry, you're not alone.
Even those who've worked there
can barely comprehend it.
How do we know?
We tracked down someone who did.
When I walked into an Amazon
warehouse the first day,
I was amazed. I felt like
a, you know, almost like a kid
going to Disney World
for the first time, you know,
trying to just take it all in.
No surprise, they're gigantic.
Known as fulfilment centres,
they're around a million square feet
and could swallow
16 football pitches.
Journalist Harry Wallop
has had rare access to one.
What need to be in the warehouses
are things people buy every day.
And that is still a vast number
of weirdly different things.
There are 175 of these monsters
around the world,
including 17 in the UK.
We've heard from the warehouse
but how do you run a place
like this?
Let's ask someone who knows.
Nadia, take one.
Nadia Shouraboura
was in charge of all of them.
My job title was Head of Amazon
Supply Chain and Fulfilment,
and my role was to lead our fulfilment
centre technology and process,
to lead our supply chain,
to lead our inventory.
Everything, basically.
Nadia soon learned the secret of
the company's incredible logistics
taking decision-making
away from humans.
We trusted computers to make
all the decisions
on where to move each item,
where to place it.
The result? Well, to a human,
it looks like a bit of a mad
jumble sale.
So you have nail clippers next door
to cookery books,
next door to protein shakes,
next door to pet food,
next door to, I don't know,
It's just illogical
to normal shoppers,
but it's part of the secret of how
they can ship stuff so quickly to you.
When you are in this
16footballfields building,
as a human,
you don't know where anything is.
And it's definitely best
for a computer to direct humans
on every task they do.
So, what's it like being directed
by a computer?
Chris worked as a picker
before becoming a supervisor.
What does a picker do?
The clue's in the name.
We have our computer screen
that shows what type of item it is
and where the location is
on the shelf,
whether it's, you know, high, low.
We'll find the item, we'll pick it.
For Amazon to get stuff to us
as quickly as it does,
staff and robots in the warehouse
have to work hard and fast.
They want you to pick these items
in less than seven seconds.
So by the time the item would come
to my screen,
I have seven seconds to get this
item, the right item, by the way,
scan it and then put it in its hole.
And that's the thing that separates
Amazon from its competitors is,
you know, we are moving
at a faster pace.
And they have to keep moving fast
to get your socks, sun cream
and salad tongs to you
in record time,
with a transportation network
that's just as computer-driven
and just as impressive,
until it turns up at your door.
Amazon has this incredibly
sophisticated logistics company
with at least 82
of its own aircraft,
and ultimately, a lot of the
products that are coming to your door
is some random delivery driver
who's driving his own battered,
you know, Vauxhall Corsa.
Why don't they have fancy branded
vans like other companies?
They realised how cheap it is to
use so-called gig economy workers.
It's very expensive to hire
proper employees
with medical and pension
and insurance.
Don't bother with that!
Get people to use their own cars,
their own smart phones,
to be your career drivers.
That's how they make the system
work for them,
but how can we make Amazon
work for us?
We've assembled a crack team
of consumer vloggers
dedicated to making your money
go further.
So when it comes to saving money
on Amazon,
there's a few cunning little tricks
you can try.
First up, don't head straight
A tip you may not actually
be aware of is that on Amazon,
you can actually buy from
the European websites.
So maybe the Germany site or Italy.
You may find that one of
the European variants
may offer the same item
for a reduced price.
Even when you factor in the extra
delivery cost,
which is usually
just about five or ten quid.
On the day we looked, this TV
on the British site cost 379.
But on the German site, even
with shipping, it was 359.
A saving of 20.
And if you are buying on
the UK site,
don't assume the price you see today
is the one that will be there
They change their prices
millions of times a day.
Th I rd party websites,
like Ca melCamelCamel,
will actually track it for you
and then will send you an email
once the price is at
its lowest price.
Although, sometimes you can give
the company
a little price nudge yourself.
Try dropping a few items
into your Amazon basket,
but then just leave them there,
don't hit Buy Now.
Wait a few clays,
and Amazon might get in touch
with a special discounted price.
Finally, don't restrict yourself
to the main website itself.
There are sections of the site
selling second-hand
and exdisplay goods,
often at bargain prices.
If you're looking for products
that are maybe big-ticket items,
electronics, then there's
websites within Amazon.
So Warehouse, Outlet, Renewed.
There's websites within it
that actually,
the prices could be up to 90%
For example, on the day we looked,
we found this sat nav for 232
on Warehouse.
A saving of over 100
from other retailers.
Just because it had a couple
of scratches on the back.
So it's well worth doing
a little dig around
when you want to buy
those big-ticket items.
Coming up... We go back
to the very beginning
to discover how Amazon grew from
an online book store
run by a computer geek...
He was just an unassuming, small,
sandy-haired person at a desk. the biggest online retailer
in the world.
I was part of a secret project
called EBS,
which stood for
Earth's Biggest Store.
In just 25 years, Amazon
have transformed the way we shop.
Unlimited choice, next-day delivery,
this is the company that have made
instant gratification the norm.
Sash? Yeah? You ordered any parcels?
We are the Mitchell-Johnsons,
we're from Leicestershire.
Our family are Amazon lovers.
What we got, what we got,
what we got? Argh!
I think we literally do have
nearly all of the Amazon devices.
What is it that you're reading?
Mind-set book.
What you doing, Mimi?
I'm watching Lego Friends.
I'd definitely say I've got a bit
of an addiction to Amazon.
Definitely a parcel
every single day.
It's the way the world is moving
I think it's been quite
Yeah, definitely. For me.
For all of us. Yeah.
Five today, so not too many.
Oh, my God, there's so much stuff!
OK. This is all for me?
No, it's not.
Perhaps it's no surprise the company
made almost 14 billion
from us Brits in 2019 alone.
Want to know how on earth
we got here?
OK, let's take a trip back in time.
It's 1993.
Man United have become the first
Premier League champions.
Ford has just brought out
the Mondeo.
And in New York, a computer nerd
by the name of Jeff Bezos
is on the cusp of changing
the world.
He was a young, successful
Wall Street executive
at one of the top hedge funds
in the city.
He was just brilliant with numbers,
he loved data.
One number in particular
would spark his interest
and eventually make him
the world's richest man.
What was that number?
In this rarely-seen interview,
he tells us himself.
I was in New York City working
for a quantitative hedge fund
when I came across
the startling statistic
that web usage was growing
at 2,300% a year.
So I decided I would try and find
a business plan
that made sense
in the context of that growth.
His vision, to create an online shop
for everything.
But he couldn't go from nothing
to everything all at once.
He started by selling one product.
One with huge potential.
Books are attractive to an internet
retailer for a couple of reasons.
Not only are they sort of small
and light and easy to ship,
but also, there's such a huge number
of books.
And Bezos realised that the internet
could have all of that inventory.
There was nothing stopping you
because size was no limit.
In 1994, Bezos and his wife
moved to Seattle
to start the business.
But what do you do when you need
$250,000 to get up and running?
If you're Bezos, you ask mum and dad
to raid their retirement savings,
which they did.
And in 1995, was born.
But who would help it grow?
People like this man, James Marcus,
otherwise known as Employee 55.
His job? To write reviews
of the books on the site.
I started at Amazon
in the fall of 1996.
The headquarters was in a
light, industrial part of Seattle
next to a barbecue joint.
And I was interviewed by Jeff Bezos.
It was a small enough company
that he interviewed
every prospective employee.
What was this legendary figure like
in the flesh?
It amazes me now to think that
he's the richest man in the world,
he's sort of a plutocratic
action figure
who runs just about everything.
He was just an unassuming, small,
sandy-haired person at a desk.
But the unassuming exterior
hid a ruthless business mind
developing ideas to make his company
one of the biggest
the world has ever seen.
First up, aggressive pricing.
It was probably within a few weeks
of my arrival
that they decided to deeply discount
New York Times' bestsellers.
In an interview for a tech website,
Bezos made no secret of his plans.
So we decided, let's, in addition
to discounting the bestsellers,
let's also discount the best books.
So we discount every book every week
that's reviewed
in The New York Times by 30%.
The discounts were a huge success
and orders rocketed.
But to guarantee meeting
such high demand
required a change
in company thinking.
Till now, it had been acting
as a middleman,
sourcing books for customers
from wholesalers.
Not any more.
Because to be able to fulfil
all the books they were selling
at these, you know,
mind-bending discounts,
you better have had some inventory
on hand.
So somewhat against its will,
you could say,
Amazon was dragged more into being
a traditional retailer
with big heaps of, you know, the new
Harry Potter book in a warehouse.
Out of necessity, the first of
Amazon's giant warehouses was born.
Soon, it was conquering
the whole book-publishing industry.
But Bezos was only just
getting started.
It was clear that there was
something more afoot
than just selling books.
It was the thin edge of the wedge
to have a gigantic enterprise
that sold everything to everybody.
Amazon was predominantly
a book-seller
through much of the 1990s,
but then it really started
to spread out.
Music, films, software and toys,
they all went online.
And soon, we could buy them, too,
as the company set up websites
in Germany and the UK.
1998 is a really big year
in Britain for the internet.
Amazon comes along, and I don't
think we were aware then
of how big a deal it was going
to become.
No surprise there.
Even insiders could barely keep up.
It was dizzying, actually, to be
a passenger in this juggernaut.
Relentless growth had to be
taking place all the time.
The expansionist impulse
had to be in play every single day.
But there was one thing
that mattered above all else.
Hi, good morning.
Hi, how are you? I'm good.
One thing that Vi jay Ravindran,
who was in charge of all the selling
technology on the website,
has never forgotten.
The culture of Amazon, which,
you know, really originates
from...from Jeff, starts with
obsessing about customers.
You know, you should wake
up in the morning fearful
that your customers
are going to leave you.
To stop us leaving, Bezos was
convinced he needed to know us better.
Much better.
And the key to that was analysing
all the personal information
we still willingly
enter into the site.
At the centre of all this
data mining,
this man, Andreas Weigend.
When people asked me
why I went to Amazon, I said,
it's really the largest lab
in the world.
Because we could collect data about
millions and millions of people.
And the purpose then was to sell
them more.
Nothing more and nothing less.
It was made clear, though,
that every click of the mouse
and every twist and turn through
the site as a customer navigated
was being saved and being added to
a sort of a mountain range of data,
and that that was going to be
It was the search terms you enter.
The sequence of search terms,
how you refined your searches.
It was what time of the day
you were looking for something.
Any data you can think of.
What did they use it all for?
They were the first to master
the technique of suggesting
to consumers other purchases
they might like.
And they did it using information
from millions of other shoppers
who were buying the same sort of
stuff you were.
As Bezos collected more and more
data on his customers,
he got smarter and smarter
in terms of recommending products
to his customers.
Today, almost a third of
Amazon sales
are based on it recommending
products to them.
We actually did not think
about it as manipulation.
We genuinely thought to help them
come up with better decisions.
For better decisions,
read "buying more on Amazon".
By 1999, it was the biggest
online retailer in the world.
Not enough for Bezos, who was
already plotting a new move
that would take his company
I was part of a very small team
that was sequestered on the
fourth floor of Amazon's building,
working on a secret project
called EBS,
which stood for
Earth's Biggest Store.
At the time, we believed we could do
anything in the world.
That's a bit arrogant, isn't it?
Not when your Amazon.
The genius plan was to massively
increase the products on offer
by letting other rival sellers
on to the website.
Before, Amazon had been like
an online department store.
Lots of stock, but all sold by
the same company.
Now it would be a marketplace,
with items from Amazon
and other sellers on the same page.
Some doubted it would work,
but it attracted customers
in their millions.
If you offer anyone,
from a sofa manufacturer,
a specialist fishing tackle shop,
a specialist camera lighting
you can say to shoppers, "Come to Amazon
and you will find anything you need".
And that turned out to be a fabulous
idea, too,
because you know, Amazon takes a cut
of every sale,
but they don't have to run
those stores.
They don't have to run
those businesses.
It's an immensely lucrative
intermediary business.
Thousands of businesses
desperate to sell online
leapt at the opportunity
Bezos gave them
when Marketplace launched in 2000.
Today, 60% of the products
available on the website
are sold by external businesses.
Marketplace was a huge game changer
for Amazon.
Our appetite for online shopping
would not have grown to the size
it has become
without Amazon leading the way.
A consistent buying experience,
enabling more selection
and lower prices,
that ended up being the Amazon
that you see today.
For many companies, the cut of up to
15% that Amazon takes
is worth paying-
They gain access to
an online marketplace,
a delivery system and an unlimited
number of customers.
Not convinced?
Hello, Creative Nature?
Then you should meet Julianne.
So this one over here is
the banana bread.
It's been the most successful,
especially on Amazon
and across the country, really.
Everyone was baking banana bread.
Her company sells a range
of allergen-free products,
like these baking mixes.
Before the COV | D19 pandemic,
she had some of her stock
on the website.
But when lockdown hit sales
she put much more online,
and was stunned by the result.
We grew on Amazon over 650%
just in those three to four months.
That growth is incredible
for a small business like mine.
Now she's planning to expand
Marketplace has made it very easy
for a company like mine
to get into the US, Germany,
without having to have
the infrastructure in place,
huge teams, which cost
a lot of money.
Julianne also trades elsewhere,
because putting all your eggs
in the Amazon basket can be risky.
If it was to switch off overnight,
it would feel like the rug's
being pulled out from under you,
especially when your success
has been so phenomenal and so quick.
But there are claims some companies
have had a sudden decrease in sales,
all because of unfair competition
from Amazon themselves.
Amazon under pressure.
State investigators from California
and Washington State
reportedly looking into
the tech giant's business practises,
particularly how the company treats
third-party sellers
in its online marketplace.
The problem is,
if you're a thirdparty seller,
the information on the marketplace
about who's buying your products,
where they're from,
what other things they like,
it's all controlled by Amazon.
We know that many
marketplace sellers
believe that their information
is ripped off by Amazon.
That when they have
a hugely-successful product,
Amazon can undercut
the marketplace seller.
And the EU authorities agree.
In November 2020, they charged
Amazon with using thirdparty data
to boost sales of its products.
There are questions that are being
raised by the European Commission
and other authorities as to,
you know, is that fair?
Is that fair competition
if Amazon is both operating
the marketplace
and competing on that
same marketplace
with a privileged situation
of having the access to the data
that none of the other competitors
If found guilty, the company
could be fined billions.
Amazon told us:
Coming up... We find out how Bezos
killed the competition.
By being ruthless...
He just wants to win.
You don't get to be worth
$200 billion
by being a nice guy in business,
...doing the unexpected...
Prime is an idea that was absolutely
crazy when it was launched.
...and driving staff to the limit.
You know, you can't be safe
and work as hard as you do.
And unfortunately,
people did get injured.
Today, Amazon dominates
online shopping.
Almost half of all internet sales
happen on their website.
From stuff you'd imagine,
like 80% of books and music... stuff you wouldn't,
like 16% of car parts.
Amazon is one of the most efficient
capitalistic machines in history.
It is growing at a rate almost
unheard of for a company that size.
It is moving into industry
after industry.
And as a businessperson,
if you're not aware of what Amazon
is doing, you should be,
because before long, it might be
knocking on your door
And be under no illusions,
this is a retailer playing to win.
Amazon's managed to grow
as fast and as quickly as it has
by not only being relentless,
but being quite ruthless.
They have been known to undercut
the competition
from the time that it was just
a book-seller through to now.
They would pricecut these companies
into submission.
Having impossibly deep pockets,
and when they were sufficiently
feeble from lack of money,
they would acquire them.
To pull off this plan successfully,
Company boss Jeff Bezos
and his investors
were prepared to make
massive losses.
He was willing to lose money
on certain products,
until he hurt his competitors.
I mean, he just wants to win.
You don't get to be worth
$200 billion
by being a nice guy in business,
For the best part of two decades,
most of its existence,
the company failed to make
any money at all.
Well, was actually
profitable in December 1995.
It must have been for, oh,
about one hour.
According to former senior exec
James Thomson, Jeff Bezos' talent
was persuading investors
it was all part of the plan.
He managed to convince Wall Street
to let him be unprofitable
for literally 20 years.
The fact that Jeff Bezos was able
to get
literally hundreds of billions
of dollars to go and play with
and take his vision and implement
it, that was brilliant.
It doesn't feel brilliant
if you're at the hard end
of all this price cutting.
It feels unfair.
Just ask Jason Burley
and Sam Fisher,
who run a book shop in Dalston,
East London.
It was a shock. It was a real shock
when Amazon came.
It felt like from now on,
if you wanted to earn a living
selling books,
it was going to be in spite of
Amazon, never because of Amazon.
They always felt aggressive.
One of the prime examples
were the Harry Potter novels,
which were a publishing sensation.
Unfortunately, Amazon
was selling them cheaper
than independent book-sellers could
buy them from their wholesalers.
And it was really such a heartache
for us
because we were meeting
new customers,
we were luring new customers
into our book shop.
How could we do that if we were
charging twice as much as Amazon?
It was a nightmare, really.
And that was just one example.
Amazon managed to do that
perpetually for every bestseller.
Since 1995, half of the UK's
book stores have closed.
Survivors like this
have had to adapt,
selling coffee and organising
events, as well as selling books.
But Amazon's aggressive pricing
has had knock-on effects
throughout the entire industry.
If we're not buying things
at a price
that will sustain
our cultural industries,
then those cultural industries
will die.
And that's a fact.
That's the long-term cost.
When we asked them about whether
they undercut competitors,
even if it meant taking losses,
Amazon told us:
It said its thirdparty sellers:
And it was:
Amazon gave book shops
another body blow with this.
The Kindle reached our shores
in 2010
and let users instantly download
up to 200 books
on to a device not much bigger than
a pamphlet.
Sales of physical books
plummeted 9% a year.
And by 2010, the company was selling
more e-books than hardbacks.
But it was another innovation
that would take Amazon
to an entirely new level.
An idea built around
speedy delivery.
You'll recognise the name.
Amazon Prime started as
a membership program me
that enabled free twoday shipping
and discounted next-day shipping
on initially, a constrictive
set of retail items
that could be shipped quickly.
When one of Vi jay's colleagues
suggested the scheme in 2005,
Bezos could barely contain
his excitement,
and called his team to an urgent
meeting at his boathouse.
It was much larger than my
twobedroom condo, I'll tell you.
It was beautiful.
It had a fullyenclosed
garage parking spot for his boat
that was viewable through glass,
and, was gorgeous.
Bezos told them he wanted
to go full steam ahead
with the free delivery club.
He thought once twoday shipping
became a natural expectation,
that suddenly, things that
you wouldn't normally
think about Amazon for,
you would buy.
But, not for the first time,
there was resistance
to a Bezos plan within the company.
Some believed that promising
free deliveries
would prove too expensive.
Prime is an idea that was absolutely
crazy when it was launched.
Let's let customers buy
as much as they want
across as many orders
as they want in one year,
and we'll just charge them
a single flat amount.
And we'll figure out
how the economics work
to ensure that we actually
still make money.
There was a lot of fear that this
would have disastrous effects.
Bezos thought it would make money,
but not if he ran out of stuff
to sell us.
To meet increased demand,
he'd need more stock and more space.
So he started a massive
building program me.
In the five years
following the launch of the club,
Amazon's warehouse space
increased nine fold.
The investment paid off.
Prime, which came to the UK in 2007,
is a worldwide phenomenon.
Only Netflix has more subscribers.
Prime has been the most successful
retailing membership program me
in the history of the world.
Just two years ago, Amazon had
100million Prime members
around the world.
Today, they have over 150 million.
More than 15 million of them
are in the UK.
A quarter of the adult population.
Attracted by delivery that's been
reduced to one day on many items
and as quick as two hours
in some cities.
Bezos had proved the doubters wrong.
The membership scheme
didn't lose money.
Earnings rocketed.
Because after joining the club,
customers started to buy more.
Once someone signed up for Prime,
their buying behaviour
drastically changed
and they became heavier
Amazon shoppers.
You're just so used to ordering
on Prime because you're a member
that you think, I'm not going
to bother taking the time
to see how much it costs
on some other site.
And membership gained a new
attraction, video streaming,
hitting the UK in 2014.
The Internet giant started making
TV shows and films,
which enticed more people
to become members.
But for all the flashy video,
the driving force of Prime
was always speed.
Though at what cost?
What do we want?!
ALL: Recognition!
When do we want it?! Now!
What do we want?!
Across the world,
workers have been protesting
that the obsession with speed comes
at the expense of their well being.
One of the key things with Amazon
is that they've come to represent
all that is bad about the modern
warehouse economy.
Where all the workers are being
every single minute of the day on
whether they're hitting targets.
You know, you can't be safe
and work as hard as you do.
And unfortunately,
people did get injured.
Chris and others say it's impossible
to take adequate breaks
in Amazon's enormous warehouses.
I would have to tell people,
like, you know,
"You have 15 minutes,
but you don't have 15 minutes".
It takes ten minutes
to get to the bathroom
or to get to the cafeteria.
ALL: Shut it down!
This year, Chris led protests
in America
over safety concerns
surrounding Covid.
This man slept in his car
for five clays straight.
He was later fired by Amazon
over claims he had breached
socialdistancing guidelines
multiple times.
But his concerns over working
conditions pre-pandemic
have been echoed in the UK.
For three weeks in 2016,
James Blood worth worked undercover
at an Amazon warehouse
in Staffordshire.
There was a real atmosphere of fear.
Most people were
receiving disciplinaries
for very small things.
So if you took too long
going to the toilet,
you'd receive a disciplinary.
If you had a day off sick,
you'd receive a disciplinary.
If you were talking to one
of your co-workers,
you could be disciplined for this.
And if you received six of these,
you'd lose your job.
It was the sense that one false move
and you could be out of a job,
which, you know, could throw you
into poverty.
You weren't treated like
a human being,
you were treated like a piece
of data on a spreadsheet.
The GMB Union represents
many warehouse workers in the UK.
It says it receives around 20
complaints a week from Amazon staff.
Some of the most common issues
that we come across
are health-related
musculoskeletal issues.
Back, shoulder, leg.
I have a belief that Amazon
are not really understanding
what humans can and cannot do.
Amazon told us that
despite misleading stories,
safety was their priority,
and they were proud of their modern
They said:
Concerns about the company's
working practices
have been public for years.
But they've done nothing
to slow its enormous growth,
particularly during the pandemic,
when sales have boomed.
In 2020, it created 7,000
new permanent jobs in the UK
to handle our extra orders.
It seems we just
can't help ourselves.
Amazon has embedded itself
so deeply into the fabric
of the consumer psyche
that even when a consumer
feels guilty about buying
from Amazon,
there are reasons enough for them
still to go and buy from them.
Good example this week, I needed
something for a set of speakers
and I wanted it by Tuesday.
Nobody else was going to get it
to me by Tuesday.
Amazon can,
so I bought it from Amazon.
I felt a bit grubby about it.
Coming up... How Amazon continued
its relentless growth
with another
ground-breaking invention...
I was made to play music,
answer questions and be useful.
...and why it could be bad news
for our privacy.
Oh, that one worked.
First one, straight off the bat.
She's gone blue.
By 2014, Amazon were the top dogs
of online retail.
Turning over $100 billion a year
by offering huge choice,
undercutting rivals
and getting stuff to us
at lightning speed.
Not only did I find the product
almost instantly,
it'll be sitting at my doorstep
by tomorrow.
How do you compete with that?
Then, just as it seemed there was
no more room for it to grow,
it launched a device straight
out of science fiction.
Designed to invade millions of homes
and become an indispensable part
of everyday life...
ALEXA: I was made to play music,
answer questions and be useful.
Embedded in Amazon's Echo speakers,
Alexa used voice recognition
and artificial intelligence
to let us play music,
find the news headlines
and, of course,
order products from Amazon,
all without lifting a finger.
Alexa came up because Jeff Bezos,
who's a big fan of Star Trek,
you know, he's a Trekkie, basically,
wanted a talking computer
just like the USS Enterprise
had on board.
And if you want proof of
his Star Trek fandom... Cheers! he is preparing for a walk-on
part in one of the films.
But with Alexa,
he wasn't playing games.
Bezos wanted a slice of
the technology
he thought was set
to dominate the world.
Nearly everyone who works
in Silicon Valley
thinks Al and voiceactivated Al
is the future.
Like Robert Frederick,
who worked on the technology
that eventually led to Alexa.
Typing is one thing,
but being able to converse
and ask questions and get a response
that you can hear,
absolutely the direction
of the future.
Just as the website grew powerful
off the back of third-party sellers,
when the world heard about their Al,
every manufacturer of electronics
wanted it on board.
Alexa is in everything.
She's everywhere. No escape.
You can buy glasses
with Alexa enabled,
you know, you can buy a robot vac
with Alexa enabled.
You can buy an Alexaenabled toilet.
If Amazon can get Alexa into
people's homes
and every corner of their life,
then we become customers
not just once a week or once a day,
but every hour of the day.
In my house,
Alexa sets up all my lights.
I don't have switches on walls.
I do a lot of shopping
through Alexa.
I ask Alexa to buy something.
It is an integral part of my life.
I worked on the grandmother
of Alexa.
I have four or five in my house.
My daughter, she grew up saying,
"Alexa, what's the weather like
Before even engaging with us.
But how did they name
this futuristic interface?
Let's ask her.
ALEXA: My name comes from
the Library of Alexandria,
which stored the knowledge
of the ancient world.
That's what she says.
In fact, it's a little more
technical than that.
The name was very hard to pick,
because you want to pick
a very unique sound combination
so that it doesn't wake up for any
sound you make or any conversation,
but it's very unique,
but it's also very friendly.
But would you want a friend who
never forgot a single thing you said?
Critics think chatting to the
Al helper is a huge privacy risk
because once it's activated,
it sends every conversation you have
to Amazon,
who store it for as long
as they want.
Something lots of us
hadn't a clue about.
We are all very new to this age
of surveillance in our households.
We've asked a lot of people
if they know
whether these conversations
are getting recorded or not.
The majority of people
that I've spoken to,
they didn't actually know.
Then later on, when we go to them
and we actually go to their account
and play the voice clips for them,
they get shocked that, OK, a message
that they send to somebody
six months ago
is still somewhere on the system.
So, why does Alexa store your data?
ALEXA: Your data stored to help me
improve your experience.
The company claims storing
the recordings
allows it to check and refine
the software.
Not a problem, perhaps,
when you're simply asking about
the weather forecast.
But what if it were recording
your private conversations
without you knowing?
Well, guess what? It sometimes does.
Alexa works off of a wake word,
and that wake word
is typically Alexa.
And it could be misrecognised,
You could be saying something
completely differently
and it may think that that is
its wake word,
and then it starts recording.
And then, as soon as it's done
it'll automatically send a message
out to the Cloud, to Amazon.
It turns out the efforts
to find a unique-sounding name
weren't completely successful.
In fact, it's pretty easy
to activate Alexa accidentally.
Oh, that one worked.
First one, straight off the bat.
She's gone blue!
Oh, Lexus.
Don't say Lexus around the home.
I lick stamps.
Oh, I lick stamps. Don't say that
one when you're knocking around.
Studies have found dozens of words
that have accidentally activated
Even some television programmes
can cause it to switch on.
We played literally hundreds
of hours of different TV programmes
and we were seeing up to 19
activations a day
from these devices.
So quite a big number,
because with each activation,
then you have a few tens of seconds'
worth of audio recordings.
And from that moment,
the device is actually recording
your private conversation
with your partner.
So multiple times a day, your device
could be recording
your private conversations
and sending them to the Cloud
to be stored indefinitely.
The average length of recordings
in Hamed's study was six seconds,
but the longest was 20.
No wonder some of those who helped
develop the system
are careful what they say around it.
In my household, we switch Alexa off
just because there's some times
when we're having conversations
and we just don't want to risk it.
Amazon told us:
But the issues with Alexa
are just part of a wider problem
with data and privacy.
With every product search we've ever
done stored indefinitely,
critics claim Amazon knows
too much about us.
The fact that we have
such large scale
and such ubiquitous data collection
around all of our interaction
means that maybe companies like
actually know us better than our
friends and family at some point,
which could be pretty soon.
And while it claims it stores
all information safely,
multiple examples of successful
hacking at other companies
have raised fears Amazon,
and our personal information,
could be at risk.
An individual does not necessarily
care about their privacy
until something happens to them.
Either their health care
information is known publicly,
or their records of their
discussions with the doctor
are being sold on the web,
or their grades or tax records
have been known to become public
20 years later.
I worry that because it's exciting
and because it's futuristic
and because it's incredibly
convenient and fun,
a lot of us are embracing this
without really thinking
what the future might hold.
But others believe our old ideas
about privacy are obsolete.
For them, swapping
personal information
for increased convenience
is a good deal.
We live in a postprivacy world.
What am I getting
in exchange for the data
that Amazon and everybody else
is collecting?
Convenience, getting new ideas,
There could be many things, but
that's what we need to negotiate.
Almost everybody has made
a devil's bargain
with these aggregators
of information.
I think we're only just beginning
to understand now
how precious some of that is
that we gave away.
Our privacy.
I think it's possible
that in a decade or so,
we will look back on this era
as a sort of a moment of madness,
where we allowed devices into our
home to essentially spy on us.
The company told us:
But what about those of
us unconvinced
by assurances of security?
Is there anything they can do?
No, not a question for you, Alexa,
but someone else who lights up
consumers' lives Frankie.
How can we protect our privacy
when using Amazon?
One way to do this is to have Amazon
stop tracking your browsing history,
so you're not going to receive
a whole bunch of constant
retargeting ads
when you're off of Amazon.
To do this, simply log into
your account and on the upper menu,
click your Browsing History.
Click on Manage History
via the drop down,
toggle to turn browsing history off.
And, Chris, any tips to share?
For one, a lot of
the Amazon Echo speakers
have a mic-mute button
actually built in.
A quick tap of that,
the mics are completely offline
and then Alexa's not listening
to a word you say.
You can also get your speaker
to play a notification sound
whenever Alexa is active, as well.
And you can also ask Alexa to forget
everything you've ever said,
just in case, you know, you've asked
her to do some pretty weird stuff.
Alexa? Delete everything
I said today.
ALEXA: You'd like to delete
the recordings of everything
said to me today. Is that right?
Next... Getting the best from Amazon
at the busiest time of the year.
The craziness, the level of orders
going out the door,
is so monumentally huge,
it's hard for anyone to fathom.
And how much of what they're selling
is unsafe.
In some cases, it led to
risk of electrocution,
chemical poisoning.
By 2020, Amazon dominated
online shopping,
was putting artificial intelligence
in our homes
and had even entered the world of
by buying Whole Foods.
And then, along came the pandemic.
Did you get bigger in lockdown?
Amazon did.
During the pandemic,
there's been obviously
a huge increase in online shopping.
Their revenues rose by at least 25%.
Their stock grew by 70%
in the first half of 2020.
Jeff Bezos' personal wealth
increased by nearly $60 billion.
He's now the first human being
on Earth
to be worth $200 billion.
The company hired 175,000 employees
within a matter of months.
All this means the busiest time
of the year
is about to get a whole lot busier.
What's it like to work in Amazon
in the heat of the fourth quarter,
when you've got Black Friday, Cyber
Monday, the week before Christmas?
The craziness, the level of orders
going out the door,
is so monumentally huge,
it's hard for anyone to fathom.
Black Friday originated in the US,
the day after Thanksgiving,
when the Christmas shopping season
starts in earnest
and retailers offer massive deals.
Thanks, in large part, to Amazon,
it's spread around the world.
2019 was the largest
in the company's history,
as it sold more than
100,000 laptops,
200,000 televisions,
300,000 headphones,
350,000 beauty products
and over a million toys.
But even this day
isn't the most frantic.
Black Fridays are hard,
but wait until you get
a day before Christmas.
That's the worst day ever.
Very, very challenging.
I still shiver
when I think about it.
In Leicestershire,
Sasha Mitchell-Johnson
is one of millions doing her
Christmas shopping on the website.
So, come into my office.
OK, so this is the place where I
order all of my Amazon deliveries.
Starting to look already
at Christmas presents.
You can just see here, actually, I'm
looking at what I can get my eldest.
What I'll do is I will save a few
items in a list of stuff that I would like.
It's got deals for under 15,
so it's going to be great
for Christmas presents.
But also hard for those working
in Amazon's vast warehouses.
Toughest time of the year for us.
So you're working either five or six
clays now,
ten-hour shifts, sometimes
11-hour shifts or 12-hour shifts.
You have to know that your clays
are shorter now,
your time, your leisure at home
is shorter now.
You're going to be at your job.
That's your second home.
So at the busiest online
time of the year,
how can we snap up a bargain?
I definitely recommend getting the
app because they do lightning deals,
which, if you're not there and then
on the website, you'll miss out on.
So on the app, it'll actually
give you notifications
if certain things that you've shown
an interest in are on offer.
If you see something you want that's
still available as a lightning deal,
I recommend you jump right on it.
This is almost always going to be
the best price,
and it's limited to a set amount
of inventory or stock.
These can run out in minutes,
or even seconds for the good ones.
With millions of products
flying out of the warehouses
from hundreds of thousands
of sellers worldwide,
it's good news for Amazon,
but is it always good for us?
How do we know the products we're
buying are what they claim to be?
How do we know they're safe?
Amazon describes this as
an open marketplace,
which means basically anybody can
show up and sell basically anything.
The shortcoming in their thinking
was they didn't realise
how easy it was for bad players
to show up
and to dump counterfeit product,
to dump product that hadn't been
properly tested.
And unfortunately, some Amazon
customers have been seriously hurt
by the faulty products
sold by faulty sellers.
0h. my gosh!
People posting online claim
faulty products
have ranged from
flaming hairdryers...
I cannot believe this! hoverboards catching alight.
It's on fire!
The consumer group Which?
have been testing products
from online marketplaces,
including Amazon's,
to see how many fail
our safety standards.
And we found out there were
high failure rates,
and in some cases, it led to
risk of electrocution,
chemical poisoning.
If something does go wrong,
will Amazon hold up its hands
and say sorry?
Amazon will say that it has
no responsibility for the product
or the content or any of the actions
of the third-party sellers
on its site.
Now, we really think
that needs to change,
given the role that sites like
Amazon play in our lives.
As the law stands,
if you sell products from your shop
or on your own website,
they're your responsibility.
But if you run
an online marketplace,
you don't have to take
for goods sold by third parties.
The company told us:
So, what can we do
to protect ourselves
when shopping on the website?
Let's ask those helpful experts
Now, when you're buying items
on Amazon, don't always just assume
that the Amazon's Choice
selection are the best ones.
This isn't entirely based on rating,
it's also based on lots of
other factors,
including Amazon's own stock levels.
Instead, you should always go
with trusted brands
that you've heard of,
and also check out those reviews.
That brings me actually
to my next tip.
You need to try to learn
to spot fake reviews.
Be wary of fake reviews.
And to be clear,
there are lots out there.
Be sure to check the name and links,
for starters.
The authentic ones
are more likely to be detailed
and not have a roboticallygenerated
Be sure to observe things like
spelling and grammar.
And also, when you're buying any
kind of electrical appliance or toy
or anything like that, make sure
they come with a CE marking.
That shows they are fully compliant
with the EEA's health, safety and
environmental protection standards.
It seems, to stay safe
on the website,
you have to work as hard as... hard as Amazon does
to reduce what it pays in tax.
Because now we come to another major
complaint about the company
its tax bill.
An issue MP Margaret Hodge
has spent years investigating.
They had a turnover in the UK
of 13] billion in 2019.
And we also know from the records
that they only paid
14 million in corporation tax.
So that's 0.1% of turnover.
That is a piddling amount, bluntly,
in relation to their turnover.
The company did also hand over
millions in other taxes,
like stamp duty and business rates,
but it's their low
corporation tax bill
that's got some
hot under the collar.
How do they do it?
Well, corporation tax is levied
not on turnover, but profits.
What's left after
all your other costs.
And by ploughing most of their money
back into growing the business,
Amazon manage to keep their profits
surprisingly low.
When people asked,
why do you not pay any tax?
Amazon turned around
and legitimately said,
well, we don't make any profit.
You tax on profit.
But critics argue it's not clear
why the company records
such small profits in the UK,
because Amazon's
far from transparent.
One of the really frustrating
aspects of the whole Amazon story
is that they have such a complex web
of companies
that it's impossible to really
get underneath
and have a proper understanding
of what's going on.
What we do know is the company pays
a fraction of the amounts
paid by highstreet rivals,
big and small.
Take the book shop
based in a high street.
They don't avoid their taxes,
and Amazon does.
Amazon, by avoiding taxes,
can sell at a cheaper price,
so they destroy
the community-based book shops,
they destroy our high street.
Amazon told us:
The company says
when all taxes are added,
it contributes a much higher sum.
Coming up... They're everywhere.
How Amazon provide
the computer power
behind some of the biggest brands
in the world.
It was the most innovative thing
that they have done to date.
And just what is the world's richest
man doing with all that money?
There is a theory that Jeff Bezos
started Amazon
so he would have enough money
to colonise outer space.
In just 25 years, Amazon has gone
from obscure online book shop
to the world's
most valuable retailer.
How have they done it?
Well, we know all about
the shopping website,
the artificial intelligence...
ALEXA: This device has received
an important update.
...even the TV.
25 years after I started at Amazon,
I am still amazed by its growth.
When I read about new initiatives,
which basically take place every day
there's always something.
But there's one something
hardly any of us have a clue about,
even though it's now the
most important part of the business.
Cloud computing.
Cloud computing is a way for
companies to do their computing
on Amazon's own computers.
It's cheaper for them, faster.
All companies need
is an internet connection,
and they can pay to use Amazon's
machines to do all their computing
and store all their data,
instead of spending millions
building their own.
Amazon Web Services is basically
hundreds and hundreds of miles
of rows of servers
and cooling systems in warehouses
ranged across America
and other places in the world.
Lots of very expensive undersea
cabling linking them all together.
Their Cloudcomputing business
is the company's most important
idea since Prime.
Just about everybody today
uses Amazon Web Services.
Netflix may have changed the way
we watch TV,
Airbnb the way
we book accommodation,
and Uber the way we get around town,
but they all did it
using Amazon's computers.
I don't think any other company
has done what Amazon has done,
to be a part of every other company
that's out there.
And I think it was
the most innovative thing
that they have done to date.
Today, they're the biggest
Cloudcomputing business in the world.
And their enormous banks
of computers
provide the vast majority
of Amazon's profits.
It's the combination of its
retail side and its computing side
that's put it in the top four most
valuable companies on the planet.
Amazon's become so big
that their revenue
dwarfs the GDP of some countries,
like Portugal, for example.
They've grown so fast.
They've been able to grow
as big as Apple in 25 years,
as Apple has grown to in 40 years.
With such enormous
and ever-growing sales,
many companies might be inclined
to take their foot off
the accelerator.
Not this one.
It's expanding into new areas,
aiming to become an even bigger part
of everyday life.
It can be anything it wants to be,
They've got that much power,
that much money,
that much market share,
they could do whatever they wanted.
They're going to all these different
finance, health care, shipping,
you name it.
Welcome to Amazon Go.
And as this ad shows,
they even branched out
into bricks-and-mortar stores,
with a difference.
Amazon just launched
a really phenomenal experience
where you don't stand in line,
you don't wait,
you just come and pick up
what you want
and you walk out
without any interruptions.
I love that experience.
Amazon has amassed
financial information
for hundreds of millions
of shoppers.
And that's going to give it
an advantage
when it's moving into
financial businesses.
Drones, to me, it's the future.
Because Amazon has many customers
who live far away.
And so, the ability to deliver
an item within an hour
to those customers
is really exciting.
Amazon's working on telemedicine,
where they'll use Alexa to set up
a doctor's appointment.
And Amazon now owns a online
pharmacy called PillPack.
Once it's conquered Earth,
what's next?
Jeff Bezos has a plan for that.
It's called Blue Origin.
And as you can see
from this interview,
he's pretty pleased with it.
And so, right behind me
is the first fully-reusable rocket,
and we just flew it into space.
There is a theory that Jeff Bezos,
you know, started Amazon,
so he would have enough money
to colonise outer space.
He owns a rocket company
separate from Amazon.
He, in the past,
has been selling about
$1 billion of his Amazon stock
every year
to fund his rocket company.
Bezos thinks we're rapidly
outgrowing the Earth.
He wants to make space travel cheap
and get us making new homes
up there.
I think he truly believes
that mankind needs to be saved.
I mean, maybe that is a power trip,
if you look at it in one way,
but in another way, you know,
it's his way
of trying to give back to the world.
Because Amazon hasn't been great
in giving back to the world.
Bezos is working on a plan
to ship cargo to the Moon by 2023.
Whether he can guarantee
next-day delivery is unclear.
But whether the Blue Origin venture
works or not,
Amazon can now count itself
as one of the most successful
and innovative businesses
of modern times.
ALEXA: I was designed and built
by Amazon.
A company that's truly changed
the way we shop, and live.
Amazon's growth
from where it started,
selling us books out of a garage
in 1995,
to being a $2 trillion company
has been completely unprecedented.
I continue to be impressed,
or even awed at times,
at the company's...ingenuity,
you know,
and at how good they are at doing
a lot of the things they do.
And yet, I'm uneasy about
a lot of what they do, as well.
I think Amazon have changed
the way we live dramatically,
and I don't think that's ever
happened, really, in history before.
Maybe Ford, with the Model T,
and the first car,
but other than that,
can you really say
a company has changed the world?
I don't think so.
Maybe Amazon are the first.