Company / division: Amazon
This is an interesting new angle from Amazon as it tries to compete with homegrown competitor Flipkart in India. It’s a good example of Amazon’s flexibility in responding to local conditions in markets outside the US – unlike some other big tech companies, it’s not rigid about a particular business model, and instead experiments as necessary to find the right products and strategies to make each market work. It’s still an uphill battle, however, in many of these markets, notably China, while it does seem to be making progress in India.
Amazon beat competitors in a new way this holiday season: Money spent on TV ads – Recode (Dec 29, 2016)
Most of the big online companies have eschewed traditional advertising in the past, and yet that’ starting to change – Google now spends money promoting its hardware, among other things. And Amazon is now spending increasing amounts – and more than Walmart or Target – during the holiday period. That can be read as a sign of confidence, but more likely it’s a sign that Amazon feels the need to reach out to new users (the 17%) to drive growth, which in turn may be a sign of a user base reaching saturation point.
With the usual caveat about not assuming a patent filing implies immediate (or even any) intention to build something, this is another fascinating step in the evolution of Amazon’s logistics operation. Logistics are vital to Amazon’s ability to do what it does, and a small competitive edge driven by innovation pays off in big ways. Definitely looks like a better use for a barge than Google’s ill-fated Glass showroom.
Not Everyone Wants to Shop on Amazon – WSJ (Dec 29, 2016)
Though the thrust of this piece is that there are lots of people who don’t shop on Amazon, for a host of interesting reasons, the flip side is that 83% of shoppers do use the site at least annually, while over half use it at least monthly. That’s an amazing reach for a single retailer, and Prime of course is intended to drive people from occasional to regular use. That 17% holdout rate is down from the high 20s just five years ago.
The e-commerce space has been dominated by news of failures by small and medium-sized startups over the past year, but there are others which are quietly finding some success, and this article cites three that might even IPO in 2017. Of course, any company in this space is also a potential acquisition target for Amazon (or Walmart, Target, or other traditional retailers). But it’s good to know that others can still succeed in the market over which Amazon casts such a large shadow.
Amazon tries to recreate Prime Day magic with the first-ever Digital Day sales event | TechCrunch (Dec 28, 2016)
Amazon has used Prime Day as well as regular Gold Box and holiday sales as ways to boost sales of physical goods, but it’s now trying something similar with digital goods. Media sales (incorporating both physical and digital media) account for about 18-20% of total revenue for Amazon, but have been growing far more slowly than general physical merchandise, so deals like this are intended to boost that growth, especially driven by new devices sold over the holidays. However, as with most of Amazon’s sales, there are a few loss leaders here designed to drive sales of many other items sold at Amazon’s usual margins.
Amazon Echo and Google Home were smash hits this holiday season: voice developers see major holiday growth | VoiceLabs (Dec 27, 2016)
This data is purely directional, but it confirms what you’d instinctively suspect – that both Amazon Echo and Google Home sold well over the holidays. The gifting phenomenon with these devices suggests a mainstreaming which is new to this space over the past year – Amazon’s massive growth in holiday sales was testament to this too. All the same, it’s obvious that Echo far outsold Home.
Amazon 2016 Holiday Shopping Press Release – Amazon PR (Dec 27, 2016)
This is classic Amazon PR – lots of superlatives and relative statements, but nothing concrete, with a smattering of slightly ridiculous “fun facts” about how many cookies could be made with the KitchenAid mixers sold. But there are key points worth noting, including the 9x increase in Echo sales, suggesting a mainstreaming of the product, and the rapid growth in Prime Now. Certainly more fodder for the Amazon dominating E-commerce narrative.
Amazon Echo and the Hot Tub Murder — The Information (Dec 27, 2016)
This is one of those nightmare stories that appears to validate lots of people’s concerns about having always-listening devices in the home. As always, the real story is less concerning – Amazon’s Echo doesn’t store everything it hears, just what follows the Alexa prompt. More broadly, however, home automation gear and the data it creates has been used in this case, and will be used in others – a good reminder that if you use services that create and store data, that data may become available to others too, whether hackers or law enforcement.
It’s clear that Amazon has felt the need to compete with Netflix’s global launch almost a year ago, but its own global offering is sparse and inconsistent. The lack of localization (or in some cases any local offering at all) is one of the most overlooked issues in consumer tech – so many services we take for granted in the US simply don’t exist or are pale imitations of themselves in other markets. Apple, Google, Microsoft, and Netflix have all done well to make their offerings at least somewhat global, but Amazon is still very early in this game.
A survey cited in the article suggests Amazon has eclipsed Walmart over the last three years when it comes to holiday shopping, and the gap is widening significantly. This further feeds the narrative that Amazon is outpacing all its major rivals in terms of not just e-commerce spend growth but retail growth overall.
America’s Big 5 tech companies increase patent filings, Microsoft holds lead in AI technologies – IPWatchdog.com | Patents & Patent Law (Dec 22, 2016)
Interesting and valuable analysis. But clearly an oversimplification to make patents held the arbiter of a “lead” in AI. Ultimately, whether you lead in AI comes down to the customer benefit you drive from it, not the patents themselves.
Is Amazon Europe’s Next Top Model? – Bloomberg (Dec 21, 2016)
A big part of Amazon’s recent success is its continuing ability to work its magic in retail segments that had once been considered off limits to an pure-play e-tailer, with clothing and fashion in particular one of the most far-fetched. This article cites its competitiveness in this segment in Europe.
The prevailing narrative is rightly that Amazon is taking on all comers and winning when it comes to share of retail and especially share of growth in e-commerce. That trend is undeniable. But it’s interesting to read about TJ Maxx and Marshalls apparently being somewhat immune to these trends.
Amazon is outgrowing the US delivery infrastructure, especially when it comes to Christmas sales, and so is making increasing investments in its own logistics operation beyond warehouses and fulfillment centers. The challenge here is the difference between average daily load and peak load at busy times, but Amazon seems willing to invest for the peak.
Angry Amazon pilots are warning last-minute shoppers that holiday deliveries may be late – Recode (Dec 19, 2016)
This piece highlights two things – Amazon’s ongoing challenges with ensuring that its deliveries arrive on time, and the complexities of getting deeper into logistics with flying its own planes. Anecdotally, I saw several packages from Amazon delayed by one or more days in early December, so the existing system clearly is feeling the strain.
I disagree with the second statement in this headline, and would want to qualify the first too, but this headline fits perfectly in our Voice and Assistants narrative, which has more analysis on why. Simply put, the insistence that Amazon somehow owns voice because it has an effective voice device in the home is overblown, and voice itself will be only one of many ways we’ll interact with our devices.
Wynn Las Vegas to equip 4,748 hotel rooms with Amazon Echo: It’s ‘seamlessly delicious,’ Steve Wynn says – GeekWire (Dec 14, 2016)
I wrote a post once in which I said anything relating to home automation is really tough to market, because you can never really show people how it will work in their own home in a store environment. Hotels may be one exception to that, and this deal with Wynn seems like a fantastic way for Amazon to market Echo and the Alexa functionality among a fairly high-end clientele.
This data – from a survey by BloomReach – shows just how powerful Amazon has become as a shopping destination: over half of online shoppers start with this single destination, versus just 28% at a search engine like Google, which would give them multiple destination options. Other retailers combined accounted for just 16% of the total, so Amazon is totally in a class of its own here.
Donald Trump Attacks Amazon and Jeff Bezos on Twitter (Dec 7, 2015)
This was the first of several attacks by candidate Donald Trump aimed at Amazon and its CEO Jeff Bezos, which appear to have been inspired at least in part by Bezos’s ownership of the Washington Post, which in turn had been critical of Trump’s candidacy (along with the rest of the liberal media and much of the rest too) in editorials. The threats issued as possible retaliation were never specified in any detail, but as with his threats against Apple during the campaign, he kept them up throughout.