Minimum Viable Amazon

Amazon’s last retail innovation came in 2005 when it introduced the Prime membership. Since then, it has announced hundreds of new offerings and experiments, but the core commerce experience remains virtually unchanged. It learned it doesn’t need to do more.

Amazon is in the business of having product selection for every imaginable search query. It has an infinite number of shelves, each serving a particular demand. Secondary, that selection has reviews to make it easier to choose a product, a promise of low prices, and reliable, fast shipping.

It is a straightforward value proposition, but one that works for most people most of the time. Sometimes, products are counterfeit, or some reviews are fake, but that happens rarely enough for most shoppers to notice. It wouldn’t be surprising if Amazon’s executives had a dashboard with a single metric titled “how many shoppers we disappointed today.” As long as that number doesn’t go above a threshold, they do nothing.

Amazon doesn’t even make product recommendations or help shoppers decide what to buy anymore. It has replaced it all with ads. During Black Friday last year, its live stream topped out at just 20,000 people watching. A tiny number compared to the potential of live streaming. Finally, its search results are now overloaded with ads, editorial content, and suggestions, rather than surfacing the best match. Amazon is subpar when zoomed in to an individual issue, but not enough to be a significant flaw.

The company would behave differently if it had material competition. However, in the U.S., for example, there is no other company that meets the primary goal of having products for every imaginable search. Walmart is getting closer but still doesn’t have the long tail of products (it is also virtually identical to Amazon in its structure). So someone trying to avoid Amazon ends up having to shop in shopping malls to find top brands, Walmart for grocery, and DTC websites for unique products.

The Wikipedia definition of a Minimum Viable Product, a term coined and popularized in Silicon Valley, is “a version of a product with just enough features to be usable by early customers who can then provide feedback for future product development.” The feedback Amazon gathered over the years is that it doesn’t need to do more than it already does. Both because it continues to grow and its competition is lagging. It instead spends most of its resources on entrenching its moat around fulfillment.

All of this to say, Amazon will not be leading in social and interactive commerce, nor will it overhaul its abused reviews system, or let alone change its aging website design. It will continue to grow despite those. The concept of shopping Amazon built - a search bar with infinite selection - doesn’t have the excitement and inspiration of some of the more modern e-commerce models, especially those in China. But the feedback Amazon is listening to - in the most basic terms, its continuing sales growth - is telling it that there is no reason to change.

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Juozas Kaziuk─Śnas

Founder of Marketplace Pulse, Juozas wears multiple hats in the management of Marketplace Pulse, including writing most of the articles. Based in New York City. Advisor to other startups and entrepreneurs. Occasional speaker at conferences.

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