Amazon’s losses were almost $400m down on last year. The retail giant’s third-quarter financial earnings report showed dramatically increased sales, but surprise losses of over $400m. It got me thinking. Why do people buy from Amazon today?
Two reasons spring to mind:
1. Convenience: customers know they will find everything they need, at such a good price that they don’t have to spend hours comparing.
2. Reliability: a fast delivery and easy returns process.
In short, Amazon is easy and you know you won’t be disappointed. It does exactly what it says on the tin. Differentiation is great, but it’s only necessary in a few relevant aspects.
Being the first to do “XYZ” may be cool, but online shopping has grown up and today people don’t buy from Amazon because it’s cool – but because it’s convenient and reliable.
As for the Fire Phone – it’s difficult to be the coolest phone on the market today. Even 3D did not suffice. So why doesn’t Amazon use its innovation power to differentiate the Fire Phone by making it the most convenient available; the most convenient for interacting with the real world. This would perfectly fit with its aforementioned characteristics.
Take the Fire Phone’s camera, for instance. Amazon gets off to a great start here with a dedicated physical button and one click for the camera. There’s no need to unlock via the display first, as you need to do with Apple.
This can be built on by delivering the best experience after taking a picture, such as:
1. Sharing the picture via Facebook, Twitter or WhatsApp – how can this be optimised? How about combining it with your Firefly recognition? If someone posts a picture of a landmark building that is recognised by Firefly, why not preoffer a caption such as: “Standing in front of La Sagrada Familia in Barcelona, Spain” or “Built by genius architect Antonio Gaudi in 1882”.
2. Allowing users to sort or categorise their pictures really easily, which currently no one else does. For example, letting pictures feature in more than one category, such as “My daughter” AND “Holiday Spain 2014”. So, categorisation is technically rather like tagging, but it’s still a challenge to make this easy to use.
3. Making it super easy to show pictures on tablets and TVs. Possibly easiest with Amazon’s own FireTV. Plus interaction with general smartTV/WiFi interfaces could be optimized.
4. Enabling the use of Amazon’s FireFly technology on existing pictures when they are displayed. Imagine mum asking: “Oh, what is this building?” (or perhaps “I love that lady’s shoes – where can I buy them?”)
While I am truly a great fan of Amazon, my point is that I feel it is trying to differentiate in too many fields. Differentiation should be done only in relevant fields, and it works best if customers can build one big picture out of it.
While Amazon may not have addressed the latest earnings miss in its statement about the results, it did, however, highlight how it is “a good time to be an Amazon customer” and that I don’t deny.
With further customer services advances like the Mayday button on the Kindle Fire and Sunday delivery for Amazon packages, these are differentiators that set Amazon apart when it comes to reliability and convenience.
We can’t all be the coolest kid on the block, but we can take what differentiates ourselves and build on that. Amazon has always put the customer first. If it continues to do so, I believe Amazon will thrive.
Carsten Kraus is the founder and chief executive officer of FACTFinder.com
Originally posted The Wall 1 December 2014