Inside Amazon - January 5th, 2017

Inside Amazon (Jan 5th, 2017)


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Even without an official presence at this week's CES in Las Vegas, Amazon’s Alexa is stealing the show. The increasingly popular digital personal assistant has appeared multiple times in other brands’ hardware at the convention already. Last June, Amazon released a dev kit for the Alexa, and that move has clearly paid off in terms of steering the conversation towards the company’s hit Echo device. This is a different strategy than the one Apple has used in the past, forcing iOS users to remain tied to the company’s own hardware. – MW

Ford, the US’s second-largest automaker, will begin to offer Amazon’s ubiquitous digital assistant Alexa this summer in vehicles equipped with their Sync 3 dashboard infotainment system. Drivers will be able to have Alexa order items from Amazon while behind their steering wheel, as well as get directions, find restaurants, and play music. An owner can even have Alexa start their car remotely before they’ve gotten off the couch. Alexa will show up first in Ford’s electric and hybrid cars. – BLOOMBERG

Several job postings published by Amazon last month suggest the company is working on a line of activewear clothing to potentially compete with Under Armour, Nike, Adidas, and Victoria’s Secret. Within the “brand manager” postings in question, Amazon says it is looking for potential candidates to “build authentic activewear private label brands that have compelling and unique DNA and deliver amazing consumer valued innovation.” Amazon has not offered comments to the press at this stage on the matter. – RECODE

Amazon has outlined a few ways Echo Dot owners might avoid enabling the next Brooke Neitzel. 6-year-old Neitzel recently managed to order a doll house and a tin of cookies using her parent’s new voice-activated Dot. As news of the anecdote made the rounds, Amazon reached out to Geekwire to let them know that completing such an order is lot more difficult than saying “dollhouse” and “cookies,” and that parents can easily turn off voice activation payments. On top of that, physical products can always be returned for free. (According to Neitzel’s mother, the girl had been using the Dot to tell knock-knock jokes.) – GEEKWIRE

The appeal of one- and two-hour Prime Now deliveries to last-minute holiday shoppers gave Amazon's coffers a major boost over the last days of the season. The last-minute push potentially allowed the company to recover any ground it lost to brick-and-mortar retailers earlier in the season. Amazon reported last week that December 23rd was the biggest-ever day for Prime Now. – CNBC

Amazon twice denied a request by Arkansas police to release any data an Echo may have recorded at the scene of a recent murder, raising larger concerns about privacy. The Los Angeles Times questions Lee Tien, senior staff attorney at the Electronic Frontier Foundation, about the privacy risks of ‘always-on’ devices like the Echo. Amazon freely admits that The Echo records a split-second of sound before it hears its wake word, which would imply the device is always listening to some extent. But is it recording? To this point, Tien says, “You don’t know how they record, and you don’t know when they’re recording... What’s not clear to me is exactly what’s going on when you haven’t said (the wake word.)” (Though Amazon denied two requests, they did eventually provide police with some of the owner's account details.) – LAT

Amazon’s third party sellers shipped 50% more items this past holiday season than during the same period in 2015. The news offers hope to investors that Amazon will end up showing a profit for the fourth quarter of 2016. Amazon has said the year was its best yet in overall sales, but high spending on various company ventures is expected to make the fourth quarter outcome a close call. Fourth quarter results should be announced over the coming weeks. – FORTUNE

Among a swell of new updates for their digital assistant Alexa, Amazon has revealed that their proprietary AI can now order food through the company’s own Amazon Restaurants service. However, because using voice commands to have a digital assistant read you every item on a restaurant’s menu is such a clumsy process, for now the service only allows you to reorder meals you’ve requested in the past via normal channels. The Amazon Restaurants service has been available since 2014. – VERGE

FROM THE MAILBAG

Inside Amazon reader Pinchas sent us a request to have our resident expert William Tjernlund discuss whether Amazon is what people might call an "evil" company. Pinchas writes, "The way I look at is, on one hand they are bringing down prices and elevating customer service. But on the other hand, they are killing... the companies that provide/manufacture the products, and private sellers are given a very hard time."

William responds: "Amazon is evil depending on who you ask. When people say Amazon is evil, they are almost always the competition. To consumers, Amazon is the best thing ever. Because of Amazon's BuyBox algorithm, Amazon almost always has the lowest price because it rewards the lowest price. That means that per UPC, there is a mini battle going on at Amazon where sellers are competing to see who can lower their price the most. If you are selling your product at $19.99 and 3 other sellers are also selling at $19.99, you will most likely share the BuyBox and get 25% of the sales for that given UPC. If one seller goes to $19.98, then they will be winning the Buy Box 100%. The BuyBox creates a race to the bottom, price-wise, and that hurts brands, brick & mortar stores, and other ecommerce websites. Though it hurts the majority of retail, it helps the consumer and gives the consumer the lowest price possible and not an inflated MSRP. Amazon is not evil, but charging extra just because you can kinda is."

William Tjernlund is an experienced Amazon seller and consultant. To learn more about him, check out this interview.

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