In its second-largest acquisition, Amazon buys the company for $970 million.
zBox is about to move out of its test phase.
ZBox Co., which makes a security delivery box known as the zBox for online purchases, is leaving the safety of its 100-home test market for the big world. But it won’t be leaving the nest without some protection. The company recently received an investment and extended its corporate alliance with appliance giant Whirlpool.
Neither company will say how much Whirlpool gave zBox or what it gets in return. But Tony Paikeday, zBox co-founder and executive vice president of corporate development, says the investment will allow zBox to expand its operations, develop new products and bring the product to market. And a big part of bringing it to market will be putting it on store shelves.
The zBox is a 2-foot-long by 2-foot-deep by 2-foot-tall security box used to receive deliveries. The box is available for $5 per month with a $60 deposit. A consumer who has leased a box downloads software from zBox’s web site. When that person shops online, the software will present a zBox button on the checkout page. When the customer clicks the button, the zBox server sends a code which is printed on the shipping label along with the address. The delivery person uses that code to open the zBox.
Each purchase produces a new code for opening the box. The consumer’s zBox and the zBox Co.’s host run the same algorithms for generating codes. Once a delivery person uses a code to deliver a package, the code is discarded and the box, which runs on a lithium battery, prepares the next code. Meanwhile, zBox’s host has performed the same function. If all goes according to plan, the host and the box will generate the same access code.
The shopper creates a personal identification number to gain access to the box. Shoppers can go to zBox’s site to request a code if they are shopping by phone or mail.
The zBox was tested in 100 households last summer in San Francisco. Although the zBox will be available nationwide, the company plans in-store distribution only in the Bay area to start. A main reason the device will be in stores is because of the company’s relationship with Whirlpool, which is using its influence to get zBox on the shelves, Paikeday says. Whirlpool’s existing retail network will carry the zBox. “Whirlpool views the zBox as the next biggest product to be in every home,” he says. Although there are no plans yet to co-brand with Whirlpool, Paikeday says he understands the value of such co-branding and has been discussing the subject with Whirlpool.
Part of the Whirlpool money will go to product development. Paikeday won’t say exactly what his company has planned, except that the boxes will likely come in different sizes and have a temperature control to accommodate perishables. Regardless of what happens to future models, the zBox already comes with a wireless port that will allow the box to notify its owner by pager or cell phone when a delivery arrives. The company can now provide this service, but learned in its market research that this was not something the public was willing to pay for-yet.