Downloaded from MOVSUBS.MX
It delivers to 100 countries,
ships 400 items every second,
Official MOVSUBS movies site: MOVSUBS.MX
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.
...to 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.
...to 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 price—cut 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, Amazon.com 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 floor,
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, sunglasses.
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 16—football—fields 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 to Amazon.co.uk.
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 tomorrow.
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 ex—display 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% cheapen
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.
...to 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.
LAUGHTER
Definitely a parcel every single day.
It's the way the world is moving now.
I think it's been quite life-changing.
Yeah, definitely. For me.
Yeah. SHE LAUGHS
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.
CHEERING 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 MacKenzie,
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, Amazon.com 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 useful.
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?
Recommendations.
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 stratospheric.
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 company,
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|D—19 pandemic,
she had some of her stock on the website.
But when lockdown hit sales elsewhere,
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 internationally.
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 third—party 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 third—party 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 have?
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, right?
...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...
...to stuff you wouldn't, like 16% of car parts.
Amazon is one of the most efficient capitalistic machines in history.
DOORBELL
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 price—cut 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, right?
For the best part of two decades, most of its existence,
the company failed to make any money at all.
Well, Amazon.com was actually profitable in December 1995.
It must have been for, oh, about one hour.
LAUGHTER
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 third—party 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 two—day 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 two—bedroom condo, I'll tell you.
It was beautiful.
It had a fully—enclosed garage parking spot for his boat
that was viewable through glass,
and, er...it was gorgeous.
Bezos told them he wanted to go full steam ahead
with the free delivery club.
He thought once two—day 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
100—million 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 monitored
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
social—distancing 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 workplaces.
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...
AMAZON ALEXA: I was made to play music,
answer questions and be useful.
...and why it could be bad news for our privacy.
Alyssa?
Oh, that one worked. First one, straight off the bat.
Electra?
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.
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!
...here 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 voice—activated 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 Alexa—enabled 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 outside?"
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, right?
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 recording,
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.
Alyssa?
Oh, that one worked. First one, straight off the bat.
Electra?
She's gone blue!
Lexus.
Oh, Lexus. Don't say Lexus around the home.
Alyssa?
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 Alexa.
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 Amazon
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 post—privacy world.
What am I getting in exchange for the data
that Amazon and everybody else is collecting?
Convenience, getting new ideas, efficiency?
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?
Yes.
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 groceries,
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!
...to 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 responsibility
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 again.
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 robotically—generated name.
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...
...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 high—street 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,
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 Cloud—computing 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 Cloud—computing 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, really.
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 industries —
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.
Currently, 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 today,
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.
Subtitles by Red Bee Media