The Tyranny of Amazon Convenience

Amazon has single-handedly - and permanently - raised the bar for convenience in online shopping. However, across the digital sector, starting with social networks, on-demand taxi services, and finishing with online retail, some people are asking what the long-term negatives of convenience are. In “The Tyranny of Convenience,” author Colin Horgan writes “But it’s convenience, and the way convenience is currently created by tech companies and accepted by most of us, that is key to why we’ve ended up living in a world we all chose, but that nobody seems to want.”

The world we all chose, but that nobody seems to want is sometimes Amazon too. Maybe increasingly so.

“[C]onvenience is a value, and one we hold personally,” Horgan concludes. “Ultimately, this is why it keeps winning, outweighing the more abstract ideas like privacy, democracy, or equality, all of which remain merely issues for most of us.” This optimization for convenience in social networks and the sudden realization of the impact it has on society is the most visible. In online retail, convenience outweighs product quality, ethical manufacturing, and other concerns.

Amazon has abstracted and hidden many of the supply chain issues from shoppers, forever changing the types of products shoppers are willing to buy online. In the most simple terms, Amazon has replaced brand equity with reviews and ratings. Which, in turn, means shoppers buy the first few search results. What brand those products come from is second and where they are manufactured is ignored, because reviews and ratings represent the quality of the product. Also, worst-case scenario, if the product is not as good as reviews claimed - queue fake reviews - Amazon has a smooth no-questions-asked returns process.

Because of the convenience of Amazon search, fast shipping through Prime, and easy returns, shoppers can safely buy unknown brands. There is virtually no risk. That’s why bestsellers across all categories on Amazon are often unknown brands.

To allow third-party sellers to tap into this convenience, Amazon has created Fulfillment by Amazon (FBA) service, allowing inventory to be stored in Amazon warehouses. Not only this enables sellers’ stock to be available with Prime shipping, but it is also convenient for sellers to offload fulfillment to a service with networks-of-scale. Everyone wins - Amazon increases Prime assortment, shoppers get more choices with free-shipping guaranteed by Amazon, sellers get to handle fulfillment affordably.

However, this convenience driving the Amazon flywheel hides some severe issues. First, Amazon’s catalog is ever growing, adding an endless number of private label brands every day. Shoppers don’t get to see all of them, but even if they do easy returns protects them. Nonetheless, the shopping experience is often confusing, presenting shoppers with and an endless list of choices. The company has tried to solve this by introducing “Amazon’s Choice” labels, but it highlights nothing else than the best most affordable option. It’s a one-size-fits-all solution.

Second, Amazon’s convenience sets expectations that other retailers struggle to meet. Not only on the speed of shipping but in assortment size. Moreover, third, because most marketplace sellers use FBA for fulfillment to participate in the Prime flywheel, selling on other marketplaces is more laborious and expensive, requiring a secondary fulfillment solution. Thus the same retailers struggling to compete with Amazon can’t quickly expand assortment by launching a marketplace - replaying Amazon’s playbook - because sellers who could sell on that marketplace are all-in with Amazon.

“Convenience decides everything,” said Evan Williams, a co-founder of Twitter. “Convenience on the internet is basically achieved by two things: speed, and cognitive ease.” In other words, people don’t want to wait, and they don’t want to think – and the internet should respond to that. Amazon is the perfect example of this. Amazon’s convenience and low-prices have permanently changed retail. Because of Amazon, shoppers buy different things at different, more often, times. Thanks to Amazon, other retailers have to follow and often fail to differentiate. Also, to participate in Amazon’s convenience, third-party businesses on its marketplace have to offer Prime. Every player in the market has to change its way to match the convenience goal set by Amazon.

Of course, convenience is what shoppers ultimately chose. However, convenience is also why Chinese sellers are the largest group on Amazon marketplace, why the cheapest t-shirt is “Amazon’s choice” despite fashion being the second largest contributor to pollution, why Amazon has no filters for made-in-America, why many product reviews are fake, and why “fake louis vuitton bag” search has results. These and other issues are not issues because convenience hides them. Convenience also has the ability to make other options unthinkable. The reason why Amazon flexed free next-day shipping on tens of millions of products is to make alternatives look like resisting convenience.

Finally, convenience is why Amazon has the biggest slice of market share in the US e-commerce market; and the slice keeps growing. The one-hundred-million-strong group of Prime members has little reason to shop elsewhere. The convenience decision made by them in aggregate, since Prime launched a decade ago, is the power which changed not only the Amazon ecosystem but e-commerce as a whole. There is no undoing it either, convincing Prime members, which in the US are half of all households, on “better” anything elsewhere is challenging. Unfortunately for Amazon, convenience and monopoly seem to be natural bedfellows.

Convenience is a tyranny because it unreasonably outweighs all else. “It would be perverse to embrace inconvenience as a general rule. But when we let convenience decide everything, we surrender too much,” wrote Tim Wu. Neither convenience itself, nor Amazon are evil - the company is an excellent execution of what the signals were asking. However, the next decade is poised to reevaluate the impact technology convenience has.

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Juozas Kaziukėnas

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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