Marketing & PR Outside the Box Technology

Amazon thinking about killing Alexa will only hurt Amazon

With the recent news that Amazon Alexa is losing Amazon billions, and set to lose 10 billion this year, I thought I’d take some time to lay out how to turn around the division and Amazon as a whole.

Define the core and understand its purpose

First Amazon needs to cut down on the Alexa products.  They need to focus on core products, the Echo ball, and the Echo puck.  After that just one Echo show.  That’s it, nothing more, focus on those core products.  There’s no need to redesign every year, make major upgrades every year, just build the best product you can and then sell it.  You can upgrade when a new technology comes along that will be a major leap forward, but other than that don’t touch it.

Second Amazon needs to understand that the Alexa service and devices are not direct profit generators and never will be.  They are however an indirect profit generator.  Alexa devices serve as a way to tie customers to your ecosystem, they remind the customer that Amazon is there and they should think of it when they want to buy something.  Think of the Alexa devices as marketing, customers don’t buy marketing, but marketing is what brings them to your store.

One of the biggest gripes people (myself included) have is the constant attempts to get me to  buy something with just my voice. I want to see what I’m buying before spending my money.  For this I would suggest creating a section on the logged in users homepage called “Alexa Suggests” and instead of asking if the user would like to buy it with their voice the Alexa device would ask if the user would like to add it to the Alexa Suggests list.  This way Amazon still gets a potential purchase and the user can be reminded to look at the product which would more than likely lead to a high chance of a subsequent purchase.

Offload the server and offer more services

Amazon could build and sell an Alexa server that would be plugged into the users network that would handle the basic Alexa commands like “turn on the lights” or “what’s the weather like”.  This would reduce the load on Amazon servers and provide a backup when a connection issue arises.  The home server could also call back to the AWS server when it encounters something it can handle meaning that the user is not solely relying on the more limited home server which could potentially result in a poor experience and negative outlook on Amazon as a whole.

Giving users the option to use a home server for their Alexa would also serve as a PR boost.  More and more people are worried about all their data being sent to Amazon, while this would ultimately still be the case, the majority of users will not understand this and feel more comfortable using Alexa with the home server.

I did also say “offer more services” so let’s get into that and why it will be a good long term ROI.

On July 29, 2022 Amazon announced those closer of Amazon Drive.  I’m willing to bet most people didn’t even know Amazon Drive existed.  Amazon Drive was launched in 2011 and almost no one used it.  Why?  It wasn’t seen as an essential product with features users want, it offered no tie in for the ecosystem.  This is what Google has mastered with Gmail, Drive, Calendar, Contacts, and to a lesser degree Keep.  Google created lock-in with these free services that users find it hard to give up and thus stay within the Google ecosystem.

Now this is where Amazon could differentiate itself from Google, right now Google has a trust problem.  They have lock-in with their core products but users don’t trust the company to maintain new products.  When Google Stadia was announced most people started the conversation with “how long till they kill this one?” Google keeps killing new projects because users don’t buy in and use them, and users don’t buy in and use them because they feel Google will ultimately kill the project.  Google created a self fulfilling prophecy.

If Amazon released the products listed below and made a commitment to the users to maintain them for a set amount of time (5 years minimum) then users would have more confidence in the product and be more likely to buy-in and Amazon could gain user lock-in.  Also with the support time commitment Amazon should also guarantee that if a product is discontinued users will be offered assistance in migrating their data to another service.  This allows users to feel confident using the products and confident that their data won’t be lost should the product be shut down.

The services

This is a bit misleading, but stick with me and you’ll understand.  Amazon should partner with NextCloud to offer a suite of services to its users, Nextcloud could be hosted on an AWS server (for a fee) or self hosted on the Alexa home server.  NextCloud has mail, document and spreadsheet creation and storage, contacts, notes and much more.  Users would just need to sign up then select their username, then Amazon would create a NextCloud instance for them at “Amazon.com/NC/Username” and then users have a preload set of core apps in their NextCloud instance that they can then start using and add more features to from the NextCloud app store.

The core apps

Mail – Amazon should offer something like Amail, yes it’s an obvious ripoff of Gmail but you need a simple email address.  Amazon already offers email functionality though Amazon SES so if they just rolled that out to everyone and made the NextCloud app the office Amail app then it would offer seamless integration.  Amazon could even build their own mail app called Amail so users would click on Amail instead of just “mail”.

Drive – At its heart Nextcloud is a storage service so by offering NextCloud the Drive replacement would be taken care of.

Calendar – There’s already a calendar app within NextCloud, just make that a preinstalled app.

Contacts – Again, there’s already a contacts app, just preinstall it.

Keep – QuickNotes is a Google Keep alternative on NextCloud, this should also be preinstalled.
Now that would be just the core apps that should be installed and configured for the user, every user should be given a tutorial on how to use the NextCloud system and be shown the NextCloud app store where they can find and install more apps.

What about storage?

Currently Google offers 15GB of storage for free, Amazon should match this for the AWS hosted NextCloud instances but limit it to Prime members only.  Why offer the service for free?  Most people aren’t going to try a service they have to pay for upfront, the key is to get buy-in then upsell them once they are locked-in.  Amazon could send one daily sales email to Amail users that they have to agree to receive in exchange for use of the product, this could help drive sales and show some positive ROI.

What about mobile?

Users will always want to be able to access their files, calendar and contacts on their phone, without that the service is useless.  First Amazon should create guides on how to replace Google and Apple services with their NextCloud service.  But then they need to take things a step further, they need to launch their own phone.  Yes I know they tried and failed once before, but that phone was focused on selling Amazon products, this phone will be focused on privacy and connection with the users NextCloud instance.

For this Amazon should work with the team behind GrapheneOS to build a phone that meets the specs that they need to offer the operating system (OS) to the hardware.  Once they have the hardware specs set they can start building them and offering them for sale with GrapheneOS.  The best part about GrapheneOS is that you can natively link your NextCloud instance with GrapheneOS and use that as an alternative to the Google services.

After buy-in

Once Amazon has buy-in they can build even more lock-in with users by building NextCloud apps for social media.  Now I’m not talking about the mainstream social media, I’m talking about things like Diaspora as an alternative to Facebook, Mastodon as an alternative to Twitter, Pixelfed as an alternative to Instagram, I could go on but I think you get the idea.

Check out https://alternativeto.net/ for these and more ideas.

Ok that’s nice and all but, but why?  Lock-in, more users interact with the Amazon hosted platform the more they lock-in to the ecosystem.  This isn’t just about offering services, this is about building lock-in and customer loyalty.  Think about it, if users can interact with their mail, files, calendar, notes, and social media from one central hub they are more likely to continue to use that central hub out of sheer convenience.  Now Amazon has millions of daily active users using Amazon branded products and when they need to buy the widget their first thought is going to be Amazon.  Think about it, you don’t search for something you Google it.

Bringing it back to Alexa

Alexa is the foot in the door, by offering the Alexa home server Amazon gets its foot in the door and gains the ability to expand its services and build customer lock-in.  Alexa and all the services I’ve listed are more marketing than direct profit generators, and that’s something Amazon needs to understand.  Sometimes the profit model isn’t obvious, but sometimes you have to see the forest through the trees.

Conclusion

I’m going to use a fortune cookie to close this, “Example is better than perception”.  Users might have the perception that Amazon won’t support these services, but if they set an example and give them long term support they can change that perception.  And that is true of any business, set the example and perception will follow.

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