RetailTechNews’ weekly Amazon Watch brings you some of the company’s biggest moves from the past seven days, analysing how the giant is revolutionising the retail space. In this week’s edition: Discounts provided by Amazon; Amazon’s new AR feature; Best Buy is now selling its goods through Alexa; and Alexa is gearing up for launch in Japan.
Discounts provided by Amazon
Amazon.com is cutting prices of products from third-party sellers on its website, moving beyond its more typical method of discounts on items it sells directly. The ‘discount provided by Amazon’ applies to products including board games and technological gadgets offered by other merchants as the holiday season approaches.
The move comes as Amazon looks to compete in the discount goods market with established competition such as Walmart. This is a move which should not only attract shoppers looking for a bargain to the site, but should also bring more third parties on board.
As the discount is provided by Amazon, the third party still gets the full price of the good. With Amazon willing to stomach the ensuing loss, this low price point should convince third parties to list their goods on Amazon, meaning less business for discount stores.
While this view makes sense from a financial perspective, Amazon has taken flack for the discount, with some third parties claiming that it devalues their goods. This is something which could cause damage to brand reputation, and be counterproductive to third parties’ long-term brand positioning.
Amazon’s new AR feature
Amazon is rolling out a new augmented reality feature for iPhone users, dubbed ‘AR view’, that lets customers place virtual versions of products into real-world scenes before buying. The tech will then enable shoppers to see how certain products would look in their room, before they buy them.
With online retailers (and the third parties who sell through them) looking to decrease the amount of send-backs they see on their items, this feature represents a big step. Seeing exactly how products fit in within a given environment should dramatically improve keep rates. It’s a plus for customers too, who should be able to select the best product for them first time around, without the hassle of ordering and returning numerous items.
Of course, the development is another blow for brick-and-mortar stores (but isn’t everything Amazon does these days?). Not only does it detract (though not totally eliminate) from their USP over online retailers, of being able to see the product for real before buying, it creates an additional USP for Amazon – you can see what the product will look like in your home. This is something no shop can offer.
Best Buy is now selling its goods through Alexa
Best Buy is now selling its goods through Alexa, representing a rare partnership between a major brick-and-mortar retailer, and the e-commerce giant. Competitors Walmart and Target, for instance, decided to partner with Google Home for their voice-activated shopping projects, rather than work with a rival retailer like Amazon.
It’s not surprising to see major retailers expand their voice-activated shopping offerings. This method of shopping is on the rise, with 43% of millennials saying they made a purchase using voice assistants (including 37% who ‘always’ or ‘often’ shop using voice-controlled devices) between July 2016 to July 2017.
However, while this represents an exciting change in the way consumers buy goods, retailers need to proceed with caution, as it could mean they are losing control of their audience. Amazon and Google will be able to charge huge premiums to stores such as Best Buy, who are seeing their customers increase the amount of shopping they do online. If they don’t strike deals allowing them to operate on Alexa or Google Home, they run the risk of losing customers who are beginning to shop with their voice assistants.
Alexa is gearing up for launch in Japan
Amazon has continued its hardware push into Asia, with the launch of the Echo, Echo Plus, and Echo Dot in Japan.
Alongside the hardware, it is also making its Alexa voice assistant available in the country. That means that developers will gain access to Alexa Skills – which has support for Japanese – while consumers will also be able to use Alexa alongside their hardware and other apps and services from Amazon, too. Amazon said it will offer Alexa voice search for Japan soon.
As part of the roll-out, Amazon has also taught Alexa to speak in Japanese. With Amazon highlighting APAC as a major region for future growth for the company in their latest earnings, this move can be viewed as part of this expansion effort.
Amazon doesn’t dominate Japan like it does America and Europe, since local player Rakuten is the nation’s top e-commerce firm, and is also present in financial services and other areas. However, Amazon’s ambitions are clear, and it has now made available all its Prime offerings, and same-day deliveries.