Thinking About Amazon (Premium)

I am probably one of Amazon’s best customers, but I don’t really take advantage of their consumer tech products and services. And I have no good answer as to why.

Most people probably think of companies like Apple, Google, or Samsung when it comes to hardware, or specific services like Netflix, Hulu, and Spotify in the consumer space. But Amazon has a hand in each of these pies, so to speak. And it is expanding its presence at a rapid clip.

I pointed out in the past that Amazon’s key advantage is that it is the only ecosystem or platform owner that can provide both physical and digital perks. Amazon Prime is the obvious example. This subscription provides free two-day shipping on most physical items for just $99 a year. But Amazon puts Prime over the top by bundling a bunch of digital goodies—Prime Video, Kindle First, Audible Channels for Prime, and many, many others—into the subscription too. No other tech giant mix and match physical and virtual goods like this.

But it is more accurate to say that this capability is only one of Amazon’s key advantages. Another is its hard line, aggressive stance on pricing: As the anti-Apple of our age, and to the disadvantage of its competitors, Amazon is the Crazy Eddie of the modern world, and its products and services are generally very inexpensive. So inexpensive that some consumer advocates are crying foul, and accusing the firm of antitrust overreach.

Amazon’s response to that criticism would likely be that it is only doing what big retailers have always done. After all, at the height of its market power, Toys R Us used to sell diapers at a loss in order to get mothers into the store so they could shop for other items. That argument is fair on one level. But it’s also grossly off-base since Amazon is no traditional retailer (or “e-tailer” as I call it). It’s a modern tech behemoth with its tendrils in more markets than anyone can count. I don’t believe that there’s ever been a company anything like Amazon.

Debating the ethical or moral impact of using Amazon products and services is, perhaps, a story for another time. But you have to feel a bit sorry for any company that finds itself competing with Amazon. No, Amazon doesn’t always “win”: its music service has never rivaled Spotify or Apple, for example, and Amazon Drive never really threatened OneDrive or Dropbox. But what Amazon does do is show up. And thanks to its enormous customer base, it has a built-in audience for virtually any product or service it desires to create.

The genius of this situation ties into to my original point about mixing physical and virtual goods. A service like Amazon Drive would never make it on its own, and Amazon doesn’t really have any compelling related services—Amazon Photos, which does exist, or a cloud-based productivity suite, which is in the works—that could justify its existence either.

But Amazon Drive, like many other Amazon offerings, can continue forward because it is, in part, a perk of Amazon Prime. Which has to be the most successful retail initiative in history. Indeed, Consumer Intelligence Research Partners reported in October that 77 percent of U.S. homes, or 90 million households, were served by Amazon Prime subscriptions.

I don’t cover the retail space, obviously, but this same report notes that Amazon and Wal-Mart received roughly the same traffic from U.S. customers in the past year. And Prime alone gets as much traffic as Costco.

Not all Amazon offerings are available as Prime perks, of course. But what Amazon has done is create an ecosystem of products and services. The theory, I suppose, is that once you’re in the walled garden, you will likely at least consider the other offerings. It’s why Apple Music is so successful for Apple: Customers love the iPhone so much already, and they’re just looking to throw money at Apple.

Amazon, of course, is shooting for a less well-heeled audience. This makes them interesting to me, since I am always looking for the real values in the products and services types that I write about. And that, in turn, brings me back to my original navel-gazing. Which is, if I’m such a fan of value, and since I already do subscribe to Prime, why is it that I use so few of Amazon’s digital products and services?

It’s a fair question.

I have certainly investigated many of Amazon’s offerings over the years. In some cases, I’ve found the limitations to be irritating, and I’ve just moved on.

A few examples. The Fire HD tablets I’ve used have always performed badly. The Channels for Prime feature for Audible requires you to be online; you can’t download content for offline listening. And I even stepped away from Kindle e-book readers because none of them can display all of the content that the Kindle Store sells, which is a crazy limitation.

But there are also examples of very popular Amazon offerings that I don’t use, the Echo family of devices being the key example. Alexa, Amazon’s personal digital assistant technology, currently dominates this market, and while I feel that can’t last, it will always be a key player. But I find myself curiously unmoved. (I do have an Echo Dot for comparison purposes, but I never really use it.)

Give my “embrace change” thing, you’d think that I would turn to Amazon again and again as its digital offerings are improved and expanded. And I do. But not with the same rigor, or even enthusiasm, that I do with, say, Apple or Google. Again, I can’t really explain this.

All I can do is keep trying, I guess. I feel like Amazon does offer great value and some truly unique offerings. And I should be more excited by that.