Companies come up with new ideas through a variety of sources: in-house experts and designers, competitors’ moves, and consumers’ demands. Most of them take these initial concepts and develop them carefully, using sometimes decades of testing to ensure they are ready to be introduced to the market. But Amazon, which is both a retailer and a manufacturer of devices, takes a unique approach by essentially outsourcing the testing phase—not to a specialized firm but rather to customers.
As part of its business strategy, Amazon aims to introduce novel, unprecedented technology products frequently and constantly. For example, the Echo Look was a camera designed solely for users to take pictures of the clothing in their closets and give them feedback about which combinations made for a nice outfit. No other company had introduced such a tool, making it truly innovative. Many adopters appreciated the value that it provided, enabling them to put together stylish looks more efficiently and confidently. But those users never grew in numbers, such that Amazon pulled the Echo Look from the market after just a couple of years, junking the entire project. Even consumers who wanted to keep relying on it were instead forced to throw out the no longer supported devices. (Amazon suggested they recycle the devices, though without revealing where they could do so.)
In a way, the decision makes sense: If an innovation doesn’t spark widespread adoption, it often is the best choice for the firm to halt production quickly, rather than continuing to spend money on an innovation that is never going to be successful. But for consumers, this continued and repeated practice by Amazon, such that it touts novel devices but then kills them quickly, can be frustrating and unsatisfying. The retailer has convinced them that a new innovation is great, and then it refuses to allow them to keep using it.
Such practices also are unusual relative to conventional approaches to innovation. Samsung took years to design its Frame TV, even though the only real innovation it represented was its ability to display art on blank screens when people were in the room but not necessarily watching the device. That is, the innovation was not particularly radical; it remained a television, just with some new functionalities.
The radicalness of its innovations is one of the justifications Amazon offers for its reliance on consumer testing (after purchase) to determine the appeal of its products. It asserts that until users integrate these previously unfamiliar devices into their daily lives, it cannot possibly anticipate the functionality or success of its introduction. Of course, it also earns profits on these early sales. That can mean frustration for consumers who shell out hundreds of dollars for an exciting new device, only to realize that they cannot use it for long.
Another potential concern relates to the risks involved in the advanced but largely untested technology devices that Amazon focuses on in its innovation efforts. Announcements of its plans to introduce an autonomous, in-house drone, as a security device to detect strangers who might gain access to people’s homes, prompted widespread warnings about the privacy implications of such an untested device. The Halo fitness device led experts to raise concerns about its potential for inducing body dysmorphia in users. Testing for such risky outcomes is not part of Amazon’s innovation process, so the potential harms to early customers who adopt are notable.
Discussion Questions:
- Have you ever bought a novel product, which you liked, and later learned that it would be pulled from the market? How did you respond?
- What factors enable Amazon to rely on consumers as guinea pigs and convince them to buy relatively untested products? Are there any other firms that might do so as well?
Source: Brian X. Chen, “Buyers of Amazon Devices Are Guinea Pigs. That’s a Problem,” The New York Times, June 16, 2021