Amazon's Psychic Fire Power

What do Amazon and Psychic Pizza Delivery have in common. Well, more than you think at least when you look at it from a marketing perspective. 

Let me start by saying that I don't own a Kindle Fire yet but that I am planning to order one as soon as its available in Europe.

But there's a lot you can say about the device without having touched it. Of course I read quite a few reviews and a some were downright negative. Slow processor this, clunky UX that and too small screen, bla bla bla. Yes, all true, probably. But it is still the most significant piece of hardware that came out in all of 2011. Here's why.

Jeff Bezos started out with a BIG idea. He didn't want to sell thousands of books. Instead he dreamed of  selling millions of books, preferably ALL books available via the web. So far he has succeeded in bringing that dream to reality pretty well.


So most readers will still think of Amazone as an oversized digital bookstore. The great thing about Amazon today is that they didn't stop at books. As we all know they started delivering household appliances, hifi equipment, computers and... digital content.

So now they started selling there own hardware. All of a sudden Amazon is playing in the same area as Apple, Dell, Sony, HP and some others. Why bother would you think? Plus apparently the UX of the Kindle Fire is poor and it doesn't offer a lot of applications. Ok its only 199$ but still. Amazon is failing here, right?

The thing is I think they're not. Much like Apple they are creating their own ecosystem that allows them to deliver content faster and better optimized than they could do if they would continue targeting the gazillion different computers and tablet on this planet. Plus, delivering digital content over your own hardware comes with numerous advantages that so far only Apple has masterd to the full extent:

• You can kindly request or in the case of Apple bluntly insist on pushing alerts and update messages, also regarding new available content, to your audience.
• Payment becomes an afterthought, specifically if prices are low and there is content available for free. In fact consumption - or if you like joy of use - comes first and pricing should ideally be connected to the actual desirability of the content.
• You can actually measure the use of the content and build recommendations on it.

Now that last point sounds familiar doesn't it. Regular users of Amazon know the feeling. They've looked at something a while ago and all of a sudden you find suggestions for similar or even the same products in your email or on the homescreen, often weeks or months later. Amazon has become really good at that. 

Now imagine what they can do if they continue polishing and perfecting these algorithms over time. There's a really great blog article on Mashable written by Matt Silverman where he quotes Eli Pariser on how algorithms are in need of improvement. 

The 7 points where matching algorithms fail today are exactly the weaknesses that Amazon's current matching suggestions don't solve, although I am still every now and then amazed by the anticipation of some of the suggestions they bring up.

Now back to the Kindle Fire and actually all things Kindle at Amazon. What Jeff Bezos has seen correctly is that issuing hardware brings numerous advantages in terms of tying your brand closer to the consumer and his preferences. In my mind Jeff has created an ecosystem that would allow him to start addressing the 7 things that personalization algorithms do poorly today. But suppose he's not even thinking of going there yet, then he still has something that Apple doesn't have...

Amazon can easily tie 'real-world' products to digital content. Although this would also require some clever algorithm tuning my gut feeling tells me that this should be easier than creating algorithms that somehow will come up with mind blowing anticipated suggestions as stated by Eli Pariser.

Let's continue even thinking about the 7 points that algorithms should do better. In fact think about age old marketing challenge that most brands would like to solve. What if marketing could actually predict what customers want and as a brand you're there to offer it by the time they start asking for it? The famous be where the puck is going to be not where it actually is paradigm.


So, slow processor, clunky UX? Maybe but I'm sure they'll fix it and while they're at it Jeff and his team will create other benefits for his customers some of which we might not even expect today.

I leave you with the wonderful Psychic Pizza Delivery cartoon while I'll give you this: Amazon is creating an eco-system with the Kindle that could potentially create more value than they've currently locked up in their warehouses and on their servers together.

Matt

Update;

Another proof of why Jeff has been right about a few more things all along (thanks to LinkedIn and Businessinsider):

14 Years Ago Jeff Bezos Told You How To Take Over The World

Written by Henri Blodget