What’s happening to Amazon’s core principles?
I have loved Amazon.
There has never been a company with which I have had a better relationship, and I can’t imagine another one that is out there right now which would be as good.
However, for the first time, I’m getting a little concerned about the future.
I’ve staked a lot on having an ongoing connection to Amazon. I’ve said before that I think it is more likely that my descendants will have access to my Kindle books than to my paperbooks.
One reason I thought that is that Amazon has three core principles:
Price
Service
Selection
Jeff Bezos has mentioned how those three are the same all over the world. While delivery methods might be different in different countries, you aren’t going to find someone who says, “I wish you had fewer choices that cost me more and got them to me more slowly.”
Recently, though, Amazon has done some things which seem to me to be moving away from those principles…and that concerns me.
Let’s start with one particularly clear example.
One of my regular readers and commenters, Lady Galaxy, alerted me to this…and I had flipped a couple of articles about it into my
Free ILMK magazine at Flipboard
Here’s one that gives an interesting perspective:
The Bookseller post by Sarah Shaffi
I’ve already written about an apparent dispute between Amazon and the publisher Hachette:
Is Amazon delaying Hachette books?
but this new development seems a clearcut violation of the three principles.
The story is that Amazon is removing the ability to pre-order some Hachette Kindle books, including J.K. Rowling’s (writing as Robert Galbraith) next novel.
Well, at this point, I don’t see that novel listed at all in Kindle format…and you can’t pre-order the hardback (that may be a change since the article was written). It simply says the hardback is unavailable, and that you can sign up to be e-mailed when it is.
I’ve always pictured people in a meeting in Amazon being challenged by any proposal with the three principles. In other words, they would have to justify how the new idea fits at least one of them (without, presumably, throwing the balance off by making the other two much worse).
Does having the book be unavailable help with selection? No, it hurts selection. Selection has to mean “what is available to the customer now”, not what will be available at some point, at least if your competitors have it. I could pre-order that book right now, as a hardback or an e-book, from Barnes & Noble.
Does having the book be unavailable help price? No. It doesn’t offer something at a lower price to fail to offer it at all. I suppose you could argue that the customer isn’t spending the money, but it doesn’t work that way emotionally for people.
Does having the book be unavailable help service? No. If a customer does want the book, they would have to wait to get an e-mail, then click (presumably) on a link in the e-mail…as opposed to just 1-clicking a pre-order button on the book’s product page.
So, if the idea was brought up in a committee, I would have hoped it would be rejected on those grounds.
Now, is it possible that it actually serves the principles in some way we can’t see?
Could it be that Hachette’s terms were so difficult that agreeing to them would have hurt future selection, service, and/or price? Maybe…but if we can’t see it, it’s hard to not feel the loss of the book’s availability…and that can affect customer loyalty. I’ve said before that I think market leaders can lose that position when they overestimate customer loyalty (as opposed to when they underestimate the competition, which is what many people think happens).
According to a book I’m just finishing (I’m in the end matter):
Thinking, Fast and Slow (at AmazonSmile: benefit a non-profit of your choice by shopping*)
people consider a loss to be much more impactful than a gain. Losing ten dollars hurts more than gaining ten dollars feels good.
This is a loss. We would have to gain something many times as good before we felt that this move on Amazon’s part was a plus for us.
If this was the only such action on Amazon’s part, I could construct some sort of “prospiracy theory” (a prospiracy is the opposite of a conspiracy…a secret plan to do something good) that would explain it.
However, as I wrote in
Kindle New York Times bestsellers shockingly up almost $1 a month so far this year
and as another of my regular readers and commenters, Roger Knights, predicted, prices have been rising rapidly (at least on New York Times bestseller hardback equivalents).
That doesn’t serve the price principle, and I can’t see how it benefits selection (unless the publishers were going to withdraw the books if Amazon didn’t raise the price) or service (you don’t get them any faster or have a better return policy).
Then, and this will seem minor to many, there has been a major overhaul of the
Kindle Help Community (at AmazonSmile)
I have tried and tried to see how the changes are better…but so far (and I’m quite imaginative) I have failed at the task.
I am a “Kindle Forum Pro”. We aren’t Amazon employees, but we have been designated by Amazon as being particularly helpful to other people who use Amazon’s customer forums. That has also been something where I thought Amazon was doing an incredible service. They freely allow criticism of Amazon in these forums, and they allow great speculation and helping of each other. Sure, that can save Amazon some Customer Service cost, but most companies’ forums just aren’t this free.
What changes did they make?
You used to be able to tell to which threads you had posted recently…that made it much easier to get back to help someone who asked a question, you asked a clarifying question (such as which model they have) and then they answered it
You used to be able to preview the thread without opening it…that was a quick way to tell if the question had already been answered. Now, I have to open each thread just to tell if they need help. I used to love going that forum to help people…I recently mentioned that I now approach it with the same feeling I have going in for a teeth cleaning at the dentist. I still now it’s a good thing, but it’s not comfortable…
They took away our Kindle Forum Pro badges (which was something which officially identified us to customers). I was helping people long before I had the badge, and will continue to do without…but for customers, it raises the signal to noise ratio. We certainly see people give answers which are wrong, and sometimes harmful. While we “Pros” didn’t always know everything, we were a pretty reliable source. In a way, I suppose it was like those “Volunteer” vests you sometimes see people wearing at conventions…it lets you know you can trust them, even if they aren’t employees
I know I would have to prove that these actions are different from what Amazon did in the past. After all, Amazon did remove the Macmillan buy buttons back in 2010, when they were fighting the Agency Model. That one, though, really felt like it was about us, the customers. I don’t know what Amazon and Hachette are tussling over, but this one just…feels like it is about Amazon.
Some of you may also bring up the price raise in Prime. That one didn’t bother me much, given the amount of raise and how long it had been since it had been raised before. It’s logical that costs have gone up considerably for Amazon during that time for that part of the business.
Why do I think this is happening?
If Roger (see above) is right, this could certainly be due to pressure to show more of a profit.
I don’t think that Jeff Bezos is short-sighted, though…quite the opposite. It needs to be true that everyone making these sorts of decisions takes the long view…not just Jeff. Jeff may certainly be turning some attention elsewhere, and eventually (hopefully a long time from now…knock virtual wood) someone else will be the CEO.
That’s assuming Amazon outlasts its defining founder.
I think it will.
My (perhaps incurably optimistic) thought is that this is a temporary aberration. Someone is going to glance up at the wall (or on the screensaver, perhaps…I don’t know) and see those three principles displayed:
“Price…Service…Selection…Price…Service…Selection…Price…”
They’ll look at someone else, look at the principles, tilt their head and raise one eyebrow.
I expect a lot of good things in Amazon’s future…as long as they listen to themselves, and follow their three North stars.
I welcome the thoughts you share with me and my readers by commenting on this post.
===
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