I recently wrote a post called “Is Amazon Invincible.” It was a bit tongue-in-cheek, because in the long-term no company is invincible. The post was actually an exercise in analyzing Amazon’s formidable strengths, but also in exploring some of the company’s weaknesses. The analysis was strictly focused on book retailing, not the many other areas in which the Seattle tech giant is an active and a formidable competitor, too.
One of the weaknesses I perceived was “social” and I was heavily criticized for this by several who commented on the post because my critics thought Amazon was a power house in social. Duh, right?
On reflection, I think that this misconception stems from Amazon’s immense strength in book reviews and book ratings. My critics’ opinion may have been further strengthened by Amazon’s acquisition of Goodreads. However, book reviews and ratings are not a social feature.
Book reviews and ratings are what Silicon Valley calls “User Generated Content.” It is content produced by users, not in-house editorial staff, but there is nothing inherently social about it as there is no interaction between readers or readers and authors.
It may actually help looking at a definition of what “social” is in an online context. My favorite definition was recently provided by venture capitalist Tomas Tonguz and goes as follows: “Social [services] have three features: user profiles, a relationship metaphor (follow/friend) and some kind of data stream/feed for content sharing.” That, in my view, is a pretty damn good definition and sheds light on whether Amazon is social or not.
Amazon has author profiles, but it certainly has no user profiles. Furthermore, there is essentially no relationship metaphor of any kind at Amazon. It is an e-commerce destination and a powerful one at that, but it is not a social network and users don’t get to interact with each other on the book pages of Amazon. The online book retailer barely understands the social graph between its users. Amazon does have a “product graph” though which shows how each of its products to other products based on user purchases (this is what powers “people who bought this also bought…”). Last, but not least, Amazon has no data stream or feed other than promotions and emails that are product-centric, not people-centric.
Let’s imagine Amazon were more social and made use of social data form Goodreads, Amazon, Twitter or Pinterest:
When, as a user, I look at the reviews of a book, these would be sorted not by most popular review, but by reviews form friends in my network whom I am more likely to trust and whose reviews I might pay more attention to. In a really sophisticated social network, Amazon would know who among the people I follow has “clout” (i.e. influences me) and the extent to which this is subject or genre specific (Facebook calls this influence-specific filtering “Edgerank” and uses the algorithm to filter what posts to display in a user’s Facebook stream) and who therefore is more likely to influence my decision to sample or buy a book. Amazon could also use such data for highlighting that a book was bought by somebody I know or follow. This is called “social proof.” Psychology tells us we are much confident buying something that somebody else we know has bought (a form of herd behavior). We don’t even have to think about this; it is instinctive.
Social also means that authors and readers could have an active dialogue on Amazon itself, which would especially help the many self-published authors to build some early traction on Amazon, which is far and away the most important distribution channel for any self-published author. A great social strategy would also mean Amazon sharing more sales data with authors and doing so more often (at least daily, but ideally real-time), so that authors can see how their social outreach effort on Amazon and other social platforms stimulates buying on Amazon. I fear, however, that this is the most fanciful wish on my side (and by many authors) and the least likely to actually happen, sadly. However, if Amazon could overcome its proprietary “share no data” instinct, then this feature would potentially make the company unassailable for the foreseeable future as “the” sales and distribution platform for authors.
Now let’s turn to those ratings mentioned beforehand. Again this is user generated data and not social data. First there is the bias to only rate stuff we either massively loved or really, really hated (a bias that is less pronounced at Goodreads, because the latter is a genuine social platform where readers are among other bookworms and thus share more). Thus average ratings can look pretty generic.
Then there are the 1-star ratings given for no other reason that the book wasn’t available as an ebook. Now how does that make the print edition less relevant? It doesn’t! Sometimes there are 1-star ratings where a user based on their own unique taste thinks that one shining example of literary fiction is not as entertaining as the latest Harry Potter novel. That is relevant to other readers with similar tastes (i.e. a distinct social tribe). Without any understanding of social affiliation or shared interests and tastes (the key glue of social interactions), we are exposed to the “noise” of irrelevant and even misleading ratings.
In short, while Amazon has a lot of great user generated content, it is still incredible weak in social. This is an opportunity for a competitor to Amazon, but the hurdle for any challenger to Amazon’s dominance in book retailing is to also build a catalog of similar depth and width, built a platform where it is equally easy to buy and the same level of trust, otherwise the challenger may just end of being a “showroom” for Amazon, where book discovery and social interactions take place, but with the final purchase still being transacted on Amazon, because the two steps are oh-so-easily unbundled and, let’s face it, most readers vote with their wallets. Readers will happily discover a book at destination B and then go to Amazon to buy it for less. There is little loyalty when it comes to our wallet. After all, nobody can see that we bought something from Amazon and that very anonymity is a barrier to Amazon being more social, so maybe Amazon prefers being asocial for a reason.
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Getting the Most Out of Amazon
– How Writers Can Use Amazon to Boost Sales
– Opportunities and Challenges in Expanding Ebook Publishing Internationally
– Ebook 201: Converting and Formatting for the Kindle