Is Amazon Trying to Turn Us All Into Drones?
Amazon isn't the first major retailer to offer subscriptions on popular products, and it’s tempting to look at these automation efforts as a temporary market-clearing strategy that will capture subscription shoppers without affecting its core business model. It’s ultimately an unconvincing view, however. Subscription services haven't taken off to a point where they seriously threaten Amazon’s business. Moreover, if Amazon creates a successful user experience around its subscription offerings, it might lure away some of its own on-screen shoppers — i.e., people who log in to buy one thing at a time from the site but end up with a cartful of impulse purchases. These customers will now press a button and avoid temptation. They'll no longer be persuaded down the winding path of discovery that drives the e-commerce experience. It’s not plausible that Amazon would devise a strategy that could so obviously backfire absent a very clear threat from competitors in the subscription space.
That Amazon Life
Consumers on Amazon’s website and apps tend to buy more than they came for, as product popularity information, suggestions and contextual promotions such as “frequently bought together” entice the consumer. For example, when I search for “Pampers size five,” I'm encouraged to wade through curated shopping lists of baby essentials, sponsored product links and complementary offerings from the manufacturer such as baby wipes. If I were to subscribe to get a box of diapers per month, or get a nifty Pampers button to push when I run out, Amazon would lose these potential sales as well as the advertiser dollars that go into promoting them. Yet Amazon seems confident that its customers who commonly buy staple products will use its automated services to enhance their spend rather than replace it. What makes it so sure?
Amazon created an experience where the consumer is empowered with information and reviews about millions of products, can quickly buy those that are most appealing, and can easily understand when they will arrive and how they can be returned. It's provided a seamless and empowering customer experience better than any other players in the space, and its comparative advantage has hardly narrowed over 20 years. Amazon introduced features like Prime, which seemed destined for failure at first, but became popular with shoppers because the retailer encouraged, rather than hampered, the habit of going to its site first to look for products. Prime created an economy of scale around purchasing from Amazon that's led to billions of dollars in extra revenues. Amazon seems confident that this habit, no, this way of life, cannot be threatened by adding in a few off-site conveniences.
