Amazon Is Learning That Cutting Edge Can Mean Getting Your Fingers Bloodied

Written by Evan Schuman
October 20th, 2009

For years, Amazon has held the hard-earned title of most innovative E-tailer. It has tried far more experiments than any other E-Commerce player (not all succeeded, but that’s the whole point. If you never fail at a new venture, you’re playing it safe far too much for E-Commerce). It has also properly delivered the most sophisticated executions, including one-click, look inside and even the early efforts with Kindle.

This month, though, Amazon is learning through two unrelated initiatives that pushing the envelope can deliver one heck of a paper cut. The first is a feature designed to be very consumer-friendly, one that flags when a product is being sold for more than list price. The other is a global Internet effort tied into the non-U.S. rollout of Amazon’s Kindle e-book reader. Both initiatives seem to stem from a retail chain that intuitively understands technology and what can be done with it, without necessarily thinking through how the new elements will ultimately impact consumers and partners.

The price notification involves an effort by Amazon to flag (with a yellow triangle, an exclamation point and all-bold wording) to consumers when an item is being sold at a price that is more than the list price. As an attempt at both discouraging price gouging and making consumers feel more comfortable with Amazon, it’s a great idea.

But Amazon didn’t factor in logical exceptions. Some of its merchants buy items early and then resell them when they’re rare. At holiday time, for instance, a particular toy that is sold out can legitimately be worth a lot more than what its list price was at launch. The same is certainly true for collectibles, vintage toys, out-of-print books and other older items. Indeed, many products become much more valuable over time. (Bananas, by the way, despite my daughter’s insistent position, are not among them.)

In short, good idea, great use of technology, but insufficiently thought out. Indeed, such a warning label could actually dissuade Amazon’s customers from buying some great bargains because the price flag clearly makes the listing look like it’s shouting, “This is a rip-off.”

The second element is global. Amazon this month is pushing its Kindle e-book reader overseas, but has chosen to disable access to the device’s Web browser. The message to be displayed, according to Wired: “Blogs and the experimental Web browser are currently not available for your country.” (Nitpick: Think we can safely opine that, sometime during the last 15 years, browsers have moved beyond the experimental phase. We know Amazon meant that it is experimenting with including a browser on Kindle, but still.)

The Wired piece argues—rather convincingly—that this problem is not one of technology (3G is much more common in Europe than in the U.S.) so much as a pricing issue, given that Amazon has agreed to eat the device’s wireless costs. Amazon could have offered to have consumers pay for the Web access, but few would likely have done so.

This effort is trickier than the price flags, though. It gets at the question of how crucial a feature Web access is for a Kindle. Is it a nice little add-on, or is it critical? If it’s trivial, then does it undermine the U.S. positioning? And if it’s critical, then should not deals have been worked out before the global rollout? That all said, Amazon’s decision could be a very legitimate one. It’s not unreasonable to argue that the Web access is more valuable in parts of the U.S. than it is elsewhere because of more ubiquitous Web access in parts of Europe.

But without any argument being made by Amazon at all, it certainly looks and smells more like a disabled feature, which is hardly the way to introduce Kindle to the rest of the world.


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