Forbes has another profile of Jeff Bezos. Seems we’ve been seeing those a lot lately, what with that recent book on the man. This one looks particularly at Bezos’s intense focus on customer satisfaction. Actually, “satisfaction” doesn’t seem to go quite far enough, because “satisfaction” implies a middle-of-the-scale response. Bezos wants the customer wowed. He wants to make everything as convenient as possible, even to the point of shaving fractions of a second from page load times.
That kind of obsession might be easy to make fun of, but give the man his due: he’s running a multi-billion dollar corporation that has ballooned into a major force in retailing over the last decade and a half. Most of the people making fun of him…aren’t.
That obsession with customer satisfaction and convenience casts the new Amazon Dash device in an interestingly different light when you think about it. As I mentioned yesterday, there’s nothing particularly special about what the Dash does. Amazon’s own smartphone app will let you scan bar codes itself, after all. But the key point here is how the Dash does it.
After all, what’s easier: fishing your smartphone out of your pocket, fiddling with your launcher to find the app, waiting for it to load, centering the camera on the bar code, waiting…and waiting…and waiting for it to focus and recognize the UPC…
…or just grabbing a wand, pushing a button, and BEEP! done?
Looking at this in light of that Forbes article, this is a keen example of the kind of customer-convenience focus that’s gotten Amazon to where it is today. People who scratch their heads and say, “So what? A smartphone could do that almost as easily,” are missing the point. The key word here is almost.
There’s a lot of frustration embedded in that smartphone experience that customers don’t even notice because they’re used to it, and there isn’t an easier way. But give them an easier way, and suddenly doing it with the smartphone will be too much trouble to bother with. And, gee, who’s the only one with that amazingly simple scanner wand? Everyone else still has annoyingly fiddly smartphone apps.
That’s just the way our minds work. We all used to use landline phones and like it, and people who’d never tried them scoffed at the idea of mobile phones—but let someone (for example, my parents) who never had tried one use a cell phone for a while, even a cheap little candy bar dumbphone, and suddenly they’d never dream of going back. The new way doesn’t have to be a lot more convenient than the old way; it just has to be enough so to make any other experience “too much hassle”—even if, like neophyte cell phone users, you never saw anything wrong with the old way before.
(And, you know, using this technology for grocery shopping could just be the beginning. What if Amazon came out with a Dash tied to Amazon Prime rather than Amazon Fresh—one optimized not for reordering but for showrooming? (Remember, this is the company that famously released a showrooming smartphone app right at the start of the Christmas season a couple of years back.) Don’t underestimate the power of convenience. It’s what has allowed Jeff Bezos to build an empire.)
Over on Seeking Alpha, an investor advice web site that I’ve been following, the announcement of the Dash was greeted with derision. “Another distraction orchestrated by Bezos,” commenter Jeffry Chmielewski writes. “Someday they will write a Harvard Business School Case study about Amazon. And it won’t be pretty.” (This is the same site where an analyst recently claimed that a statistically-derived fair market value for Amazon shares would be $61.80. Said shares are currently trading at $323.)
I find the whole thing hilarious. As I said the other day, Amazon doesn’t know it’s “supposed” to fail, so it keeps right on succeeding instead. Every time Amazon does anything out of the ordinary, pundits are quick to jump all over it and claim the company has jumped the shark and the End Times are nigh. They said that back when Amazon first came out with the Kindle—which proceeded to revolutionize the struggling e-book market and give Amazon such monopoly power in the e-book world that the big six publishers had to collude illegally to get it to stop. And they just keep saying it. What are they thinking—that if they keep on predicting Amazon will go down the tubes, sooner or later they’re bound to be right?
As a company, Amazon is doing amazingly well. It might not be showing much of a profit in terms of earnings per share, but it just keeps on getting bigger and bigger, pouring all of its money back into further development so it can get even bigger than that.
What, do people seriously think Amazon runs at a razor-thin margin because it can’t earn enough money to make a profit? Does anyone really believe that in any sense other than wishful thinking? If that were the case, would Amazon be such a problem to all its competitors and some of its suppliers at this point? If Jeff Bezos ever wants to turn a huge “profit,” all he has to do is flip a switch to slow down building out for a while, and suddenly Amazon will have more money left over than it knows what to do with.
Which is why, even if it does turn out that both Amazon Dash and the $300 a year Amazon Fresh are white elephants that go swiftly down the tubes, Amazon is hardly in any danger of going under. It’s big enough that it can afford to try new things, even new things that seem crazy to outsiders. After all, you can’t do something new without trying something new, and part of the price of that is that some of the things you’re trying could very well fail. But you’d never have gotten to the ones that succeed without those failures.
Jeff Bezos knows this. And anyone who ignores his track record is just setting themselves up for yet more unpleasant surprises further down the line.