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Why Amazon Doesn't Understand Social Commerce

by Leigh Duncan-Durst  |  
November 23, 2010
  |  7,668 views

In this article, you'll learn...

  • How a pioneer in e-commerce has not been keeping pace with the changes in social media
  • How Amazon fails to respond to fans and foes alike
  • What not to do when confronted with a PR nightmare

I began writing this article on November 8, after a series of interactions with Amazon.com. Two days later, a furor erupted over Amazon's sale of a self-published book titled The Pedophile's Guide to Love and Pleasure: A Child-Lovers Code of Conduct. The book has been described as a guide for how to approach young children. TechCrunch was the first on the scene with an article, followed shortly thereafter with a second article, calling national attention to the issue and denouncing the retailer's decision to defend the presence of the book under an "anti-censorship" argument. The articles triggered public outrage, resulting in a backlash via digital, social, and major media, including calls for a boycott. Unfortunately, the attention also worked to drive the self-published book to the Top Sellers list, although Amazon later removed the book and adjusted the rankings of other adult content on its site.

This article is focused on Amazon's use of social media, rather than "Pedo-Gate." However, because the incident occurred during the preparation of this article, it affected the trending and research conducted. Nevertheless, the key criticisms about Amazon's approach to social media are made even more salient in light of the recent drama.

* * *

For more than a decade now, Amazon.com has been the darling of the ecommerce world. The site has been reliable, predictable, and consistent. It has been a pioneer in the use of ratings and reviews, chapter sampling, gift reminders, wish lists, and a host of other social and practical features set the bar for online shopping. Amazon has offered great user and customer experience, from the Web interface to its call center face-to-face discussions.

It would be a disservice not to point out that Amazon was a game-changing leader in social commerce well before the social media frenzy and hype of the past several years.


But the Playing Field Has Changed

Today, the site-driven "rating," "tell-a-friend, "add to list," or "write a review" are commodity functions found on any good shopping site. On the Internet, the standalone Web presence is giving way to the networked economy, as interactions and transactions scatter across multiple hubs. Websites are now interconnecting via open source or open API to other sites, tools, apps, networks, and communities. People don't just interact with people, products, and brands, they like them, follow them, and friend them—forming tangible relationships—without leaving the digital space they're in.

When it comes to shopping, products are accessed, sorted, compared, reviewed, rated, and purchased across sites, browsers, platforms, and devices with relative ease. An increasing number of websites leverage embedded site features and services such as Facebook, Twitter, You Tube, and others. These help people interact, explore, discover, investigate, compare, check in, recommend, purchase, and give easily—regardless of the site, access point or platform used.


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Leigh Duncan Durst (leigh at livepath dot net) is a 20-year veteran of marketing, e-commerce, and business and the founder of Live Path (www.livepath.net).

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Comments

  • by Timo Tue Nov 23, 2010 via web

    There is a lot of media attention right now but will it really have an impact on their business? I doubt it.

  • by artee Tue Nov 23, 2010 via web

    Can't believe that Amazon can do such a blunder!!
    And on twitter they have just 1 verified account?! what about the other streams?
    A gud study and a clear example of how once a leader cant always remain a leader unless they innovate/adapt continuously.

  • by Leigh Durst Tue Nov 23, 2010 via web

    @Timo - you make a good point. Amazon has a lot of critical mass and this isn't the first negative blip on the radar over similar issues. However, as I mentioned, this article wasn't specifically focused on the Pedo-Gate issue -- but on Amazon's misuse of social tools. My assertion is that they have much to gain here -- and a lot to loose, as well. Customers are customers - profit is profit.

    @Artee Young, innovative companies start off as agile and inventive. Over time, however, they develop a more solid, feature rich platform. AOL was like this... and Amazon is, too. The problem is, as the industry adopts these innovations they become commodities... so "forerunners" face a constant battle to innovate and set the bar higher... only with more operational baggage. Sometimes, companies can't keep up in this game. While it's hard to imagine Amazon tanking for another competitor -- it's not impossible. Perhaps that's why right now, Amazon is buying niche players with excellent eCommerce operations (Zappos, DIapers.com and others). I've watched recent interviews / features on Jeff Bezos. It does seem to me that amazon is heavily platform focused -- especially with regard to the AWS platform... It is my assertion that, as a result, they have developed some vision and listening problems. These have prevented Amazon from seeing their own hypocrisy on the social grid -- and in several other areas. As an Amazon shopper, mMy hope is that Jeff Bezos sees this and is able to again mobilize smart people to resolve these issues - before they subvert the excellent customer experience that is the hallmark of this Brand. :-)

  • by Lucretia Pruitt Wed Nov 24, 2010 via web

    Wow Leigh. That is an awesome article.
    The density of information will no doubt cause more than one "scanned it - Amazon will be just fine, they can afford to ignore people, it won't hurt" readers.
    But hopefully the message gets heard where it really needs to be: by those at Amazon who will make their decisions regarding their continued use, misuse, and non-use of the rest of the social web. Jeff Bezos is smart (very) and I expect that his team will also consist of those who can see this for what it is: an opportunity.

    As for anyone else - the lessen that a company cannot be so dominant that it can afford to ignore customers & the way *they* want to use technology has been written repeatedly in history. I considered listing a bunch of examples - but anyone who knows business should be able to think of a few instances of their own. The lesson that ignoring your customers' needs (not just wants, but needs) can & will hurt your bottom line and give rise to competitors who 'challenge' on the basis of service.
    Okay, I'll concede to temptation and list one. Blockbuster didn't see Netflix coming. Late fees, poor customer service, and an attitude that 'nothing could take them down now' left a space in which Netflix, with their 'never a late fee' , solid enough distribution method that they could get DVDs to their customers within a day, and a belief in excellent customer service, could move in & take over the space.

    Is Amazon the current dominant online retailer? No doubt. But all it takes is a rising reputation for poor customer service, ignoring the developing social web and believing that your platform is the *only* place you need to interact with anyone - and Amazon can be the next AOL.

    Again, thanks for all of the amazing work Leigh.

  • by Lucretia Pruitt Wed Nov 24, 2010 via web

    Argh. lessen/lesson - hate it when I can't edit a comment and notice a silly mistake like that. :\

  • by Leigh Durst Wed Nov 24, 2010 via web

    Lucretia,

    Thanks for taking the time to put in such a salient comment. I grappled with the length of this article, but out of respect for Jeff Bezos and the Amazon team, I wanted to be thorough - even if at a high level.

    I'm reminded of the phrase, "Pride cometh before the fall" with regard to your references about fallen giants... like Blockbuster. What's ironic is that the short sightedness was terribly, terribly clear to the general public. It's sad when we justify or rationalize our blindness... isn't it?

    Based on recent interactions with folks at Amazon, I do believe there is a strong desire to hear these kinds of stories and take action. :-) I hope to see good things happen soon.

    Thanks again for taking the time to comment.

  • by Paul Marsden Fri Nov 26, 2010 via web

    Super post Leigh, one we thought warranted a full post reply.

    http://socialcommercetoday.com/why-amazon-does-understand-social-commerce/

    We agree with you that Amazon is lacking in certain areas - but that it really does get social commerce - keeping one eye on the money.

  • by Leigh Durst Mon Nov 29, 2010 via web

    Paul,

    Thanks for sending me the link to your post. Posting this detailed response in both channels because the Mprofs article will only be publicly available until tomorrow.

    What made Amazon great to begin with wasn’t just selling… it was SERVING. Amazon’s strides, however large or small, such as enabling social sharing, link shortening, acquiring category leaders and investing in social innovators do *nothing* to answer the company’s failure to SERVE people within social channels.

    You say:
    “For big companies, the best kind of social is often when social is not used to talk to customers, but is used instead to enable customers to talk to each other, and to shop smarter.”

    This may have been true for eCommerce like, four years ago – but it only applies to things like ratings, discussion, reviews and referrals — the “innovative” tools of yesterday that are now commodities on retail sites. It doesn’t hold true because the crowd isn’t going to help a customer whose order is lost, or whose data is incorrect, or who is the victim of a system malfunction or a broken down delivery truck. The crowd isn’t going to help when there’s fraud against your account…

    Providing service and support is an integral and critical component of running a successful retail business. When any service-centric business sets up a presence within one or more social channels, they MUST have a game plan for service. At a minimum, the company should clearly direct them to proper channels for response and resolution. This is especially true for Amazon, where great customer service has been a hallmark.

    I’m well aware of the Sfund, and Bezos’ attention on Amazon Web Services (AWS) and its extension and domination into the marketplace. I pointed out some of this in my article already. However, after about 19 years in eCommerce and digital/web strategy, I refuse to get caught up in shiny object syndrome.

    Every day *people* don’t give a beaver’s dam how many companies Amazon has acquired or invested in, or how many technical hoops were jumped through to produce shorter URLs. People want to find stuff, buy it, and have it delivered on time. When they have questions and things go wrong, they want help – right where they are — and in a timely manner. They don’t want to be patently ignored in channels where Amazon *claims* to be active. This is the blind spot our research addresses, and the critical flaw in Amazon’s approach to social commerce.

    To your earlier point, this ISN’T about demanding perfection — it’s about calling attention to Amazon’s pattern of blatantly ignoring potentially hundreds (up to more than a thousand) people each day within venues where the company has a WELL established presence. This includes Twitter (15+ active accounts) and Amazon (At least five official fan pages), where they will not respond to “point-of-need” requests for help, assistance or response. To brush that off as a small thing seems irresponsible.

    I spent a significant of my career building successful eCommerce presences for blue chip brands — which perhaps helps explain my perspective. Maybe this is why I find it difficult to understand how you can so easily dismiss the social CRM aspect of these tools. Even if you have no experience running a customer-centric retail enterprise, it’d be hard to miss the success stories of companies like Dell, Comcast, Best Buy and others, who are using social media to serve people well. They’re also doing it affordably and effectively while driving sales and WOM.

    In parallel, it seems that Amazon has taken the path of least resistance to promote and sell in social channels. You call this smart, while I call it short-sighted in light of the company’s total failure to serve people. Sadly, Amazon is still trying to figure out how to serve and they’re behind the eight ball on this one.

    When I see signs that Amazon is taking on the customer service mountain, I’ll cheer for them… When I see a return to a genuine focus on service, I’ll rejoice! Until then, we can agree to disagree. :) Thanks for adding to the dialog.

    Leigh Durst

  • by Andy Pearson Tue Jun 21, 2011 via web

    Fascinating article! thank you for taking to the time to write this (and to support it with a lot of casing examples!)

  • by Leigh Durst Tue Jun 21, 2011 via web

    Thanks Andy. Appreciate your comment!

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