From Bookstore to Smart Speaker Behemoth: How Amazon Conquered The Bookstore and is Using it to…
While independent bookstores are experiencing a recent boom, chain bookstores like the kind Amazon Books resembles are clinging on for life. Borders, which a decade ago rivaled bookstore giant Barnes & Nobles, went bankrupt in 2011 in large part because it failed to adapt to Amazon’s reordering of the bookselling landscape. Amazon’s business model steamrolled Borders and continues to eliminate chain books stores nationwide, even as a majority of young Americans still
Amazon was able to outcompete its competitors online, and moved to capitalize on the market they once dominated. By using the bookstore platform as a placard to showcase its newest and shiniest tech, the brick-and-mortar stores act as kind of living Amazon museum, a monument of business conquest sitting atop the grave of its first major victim.
As Amy Frykholm notes in The Christian Century, the physical book store serves as a tragically ironic nod to Amazon’s disruptive past. While wordsmiths at the store can select from highly selective titles pulled from Amazon’s best-sellers list and genre-specific titles, “Selected using customer ratings, pre-orders, sales, and popularity on Goodreads,” these limited relics of the past are overlooked when paired along Amazon’s growing arsenal of hardware.
“The store serves as an enticement to what the technology industry calls ‘gateway’ products,” Frykholm writes. “If you buy a Kindle at Amazon, you might also use Amazon to download movies and music.” In short, if the Amazon’s homepage were a physical space, this would be it. A temple of technology, where consumers are encouraged to experiment with the new, and the company’s recommendation algorithms come to life.
Launched in 2007, the Kindle marked the first truly revolutionary hardware success for Amazon. Eleven years, more than 10 models and tens of millions of units sold later, (Amazon chooses not to release exact sale numbers) the Kindle remains the unquestioned e-reader champion.
When it was first released, the Kindle succeeded in spite of, not because of, consumer demand. Readers in 2007 by and large preferred the weight and feel of physical books. E-readers lacked mainstream appeal. Nonetheless, Amazon pushed forward with its first Kindle: an ugly, boxy device with an awkward physical keyboard and an expensive price tag.
Within three years, Amazon was selling more e-books than physical books on its site, according to The Nation.
According to a March poll released by the Pew Research Center, 26 percent of American respondents said they had read an e-book in the past month. That’s up from 17 percent in 2011. In that same poll, nearly half of all college graduates said they had read an e-book. More than a mere hardware success, the Kindle applied a shot of adrenaline to the e-book market as a whole.
For every Kindle success story of technology on display at the Amazon book store, there are an even larger number of failed ventures, lost and forgotten to time. On its path to hosting the likes of Netflix and NASA on its cloud web services and its recruitment of millions of Prime members, Amazon took on a number of risks that ended in complete failures. Some of Amazon’s lesser known ventures away from books included the acquisition of prominent speciality online brands likes Zappos.com (for shoes) and Diapers.com (for, eh, Maximum Absorbency Garments).
Amazon tried making a name for itself in hotels, digital wallets and music importing, with varying degrees of disaster. The behemoth also failed to realize its Venmo alternative, Amazon Web Pay, as well as its Quora — esque Askville.com.
These examples are far from comprehensive, but they represent a willingness by Amazon, largely a result of its explosive early growth, to take risks. And while the Kindle, propped up in shiny glory atop polished panels at its bookstore represents a major advancement for Amazon in the hardware space, some of Amazon’s other failed tech gadgets are nowhere to be seen.
The Kindle was one of the first success stories to emerge from Amazon’s Lab126, the company’s hardware research and development wing located in Sunnyvale, California. Started in 2004 and with some offices down the street from Apple in Cupertino, Lab 126 is responsible for all of things Amazon hardware. Riding a high from the Kindle boom, Lab126 had all the affirmation it needed. Amazon found it was no longer reserved to e-commerce. The Kindle proved they could make gadgets, and they could make them well.
People in the lab, according to a report by Bloomberg, refer to the Kindle as “Project A,” and the Echo as “Project D.” (“Project C,” an alleged augmented reality venture according to the report, never managed to take off). While A and D are clear booming successes, others, like the defunct augmented reality project, received less fanfare.
Then, of course, there’s arguably Amazon’s greatest gadget flop of all time — “Project B,” the Fire Phone.
The Fire Phone, a sleek, futuristic, feature heavy iPhone competitor released on July 25 for a starting price of $199 with a contract.
Within two months, that price dropped to 99 cents. The Fire Phone, Amazon’s most highly heralded hardware device since the Kindle, cost less than a Bic lighter.
As Marcus Wohlsen noted in Wired, consumers typically buy phones for two reasons: “incredible design or irresistible price.” But as Amazon quickly learned, the Fire Phone had neither. Amazon’s phone venture leapt away from many of the simple designs and consumer driven elements that reaped so much success for the Kindle. Amazon ceased creating a device its users actually wanted. Instead, as a detailed report from Fast Company’sAustin Carr explained, “when it came to the Fire Phone, that customer apparently became Jeff Bezos.”
Bezos’s own personal creative brainchild, the phone attempted to launch with a slew of then aw-inspiring features like contactless payments and force sensitive grips. Of all the missed potential though, one of the most reported and most consequential mishaps came from the costly push for Dynamic Perspective — a 3D display that tracked a user’s face and adjusted the on screen image to switch perspectives according to where the image was viewed from.
Bezos, according to ex-Amazon employees who spoke to Carr, wanted Dynamic Perspective to be the Fire Phone’s hallmark feature, meant to rival Siri on the iPhone. In hindsight, Bezos appears to have gravely misjudged interest in the feature from from anywhere other than his own perspective. When asked about the logic behind Dynamic Perspective, one former Amazon working on the project told Carr, “Whenever anyone asked why we were doing this, the answer was, ‘Because Jeff wants it.’ No one thought the feature justified the cost to the project. No one. Absolutely no one.”
These expensive Bezos feature fantasies snowballed. By summer’s end, the Fire Phone remained uninteresting to consumers and cost the company over $170 million in loses. In the end, Amazon’s first big hardware successor to the Kindle faded away in embarrassment because it failed to replicate the Kindle’s core elements: affordability and simplicity.
Just four months after the Fire Phone’s release, Amazon would return to these fundamentals, with the release of the less hyped, but enduring Echo.
Alexa: The Kindle’s Natural Successor
Back at the Amazon book store in Manhattan, resting atop a white faux marble table, sit five Kindle models. Directly behind them on the other side of the table, lay the Alexa-powered Echos. Though just three years old, the Echo appears on pace to follow a familiar path first laid by its Kindle cousin.
Anil Dash, a technologist and writer, accurately predicted Alexa and the Echo’s explosive expansion in 2016. He described the device as “the first consumer electronic product since the smartphone that’s poised to become a daily habit for millions.” In his blog, Dash posits several reasons why the Echo succeeded where other assistants did not. For one, the Echo, being tied at the hip with Amazon’s brand, offered consumers a level of trust built up by the Amazon brand. The Echo also lacks a clear, definitive category, something Dash sees as a benefit, not a flaw.
“Maybe it’s technically a ‘smart speaker’ or something like that, but that misses the entire point about its utility and the connected services that power it,” Dash writes. “If no category name emerges, that will bode well for Amazon, who might well become synonymous with the product category.”
The Echo has also opened up a new world of third party partnerships which will further extend Amazon’s hardware reach. At the end of 2016, according to CNET, there were only 10 Alexa enabled devices people could buy. One year later, that number was over 100 and increasing.
Even with its impressive sales, Amazon’s Echo is far from perfect. For one, Alexa currently only speaks three languages, and if you happen to speak English with an accent, well good luck. Since its release, Echo devices have also proven a common and relatively easy target for hackers. Then, of course, there are the privacy concerns. Perhaps it’s an inevitability of an ever connected world that people will eventually cave and subscribe to an always listening, data mining hunk of plastic. Until then though, valid concerns over privacy and how police and governments will use this information remain, a concern Dash mentions in the post.
“When combined with completely legitimate concerns about how this data will be used by government and law enforcement, and whether Alexa data will need appropriate subpoenas or can be monitored and accessed without our knowledge, Echo’s role in enabling surveillance culture can’t be understated.”
Another point worth considering: While the Echo still wields a dominant arm in the virtual assistant and smart home speaker sphere and is continually expanding to new enterprises, like hoted hospitality, its competitors are not absent. Both Apple and Google have their own smart speaker products set on disrupting Amazon’s de facto monopoly.
If the Echo does live up to its Kindle counterpart in spearheading an entire industry, its prowess will have come at a cost. Form the very beginning, Amazon’s rapid success rode on the back of a culture that pressed workers to the brink. In Stone’s book, a former Amazon employee reflected on the company’s early years, and recalled being told, “You can work long, hard, and smart, but at Amazon.com you can pick only two out of three.” A 2015 report by The New York Times investigating Amazon’s business practices confirmed that this ethos remained two decades later. Amazon’s ruthless conquering of each new industry, and presumably the smart home, owed itself to Darwinian competition and the not uncommon sight of grown adults crying at their desks. So entrenched was this ethos that the company even considered calling itself “Relentless.com,” a domain which to this day, still redirects to the Amazon homepage. That’s one way of putting it.
This sense of being extends beyond blue collar factory worker and up to the designers of products like the Kindle and Echo. One engineer, “when asked whether it was inherently ‘fun’ to work on a product like the Echo,” by Bloomberg, “scoffed that, to describe Amazon, no one had ever used that word with a straight face.”
If Amazon succeeds in cornering the smart-home market for the long haul, a feat it appears posed to do, then this may validate its successful — albeit ruthlessness — tactics. For the Midtown Manhattan passerby, its triumph would also add another tier of legacy to its physical bookstore museum.
Whatever comes next for Amazon in terms of hardware, one may safely expect to see it showcased at the Amazon bookstore, marketed and praised, an arms length away from the physical books that started it all.