business news in context, analysis with attitude

by Kevin Coupe

TechCrunch has a story about how, while Amazon’s best-selling item during the recent quarter was its Alexa-powered Echo Dot, it didn’t make much money off the item. In fact, Amazon says it hasn’t priced the Dot to make money.

Instead, the story says, “Amazon sees Echos as another means of connecting with its customer base — its most avid, engaged customers, that is … While some reports have dismissed Echo devices’ potential for online shopping, Amazon appears to be playing the long game with regard to voice computing. With an Echo in the home, consumers are more likely to remain a Prime subscriber, streaming Prime music or audiobooks or — on its devices with a screen — watching Prime Video. As Amazon advances its e-commerce strategy with Whole Foods and Prime Now, it also sees Echo as a means of getting items to your door within an hour or two, simply by way of voice commands.”

Exactly.

We’ve been saying this here on MNB pretty much from the moment that the Alexa technology was introduced - that sure, you can get the time and weather and all sorts of other information and content from Amazon’s Alexa-powered devices, but they’re really there to make buying easier.

Same goes for Google Home. And Apple’s Siri and HomePod. It is all about creating ecosystems, and enabling behavior, and then locking people into their own habits. This is a race, no question about it.

Making a lot of money off each Dot sale is short-term thinking. Putting a Dot in every home in America is long-term thinking.

By the way, the Dot is just the tip of the iceberg. TechCrunch notes that in 2018, Amazon “saw more than 100 new products with Alexa built-in launched from third-party manufacturers, bringing the total up to more than 150. And Alexa works with more than 28,000 devices, like smart home devices and other hardware, from across 4,500 brands.”

By the way … I’m scheduled to participate in a session on this subject, entitled “Giving Voice To A New Consumer-Retailer Connection,” at the upcoming National Grocers Association (NGA) convention in San Diego. Sounds to me like it is pretty timely … and an Eye-Opener.
KC's View: