Amazon Strategies

Amazon expands mobile/iPhone capabilities.

I haven't seen this covered in the ecommerce World, but it is in the startup press.  Earlier this week, Amazon acquired the startup Snaptell.  Snaptell had a free app for the iPhone and Android that allowed you to take a picture of a random product, have it identified and then price shopped online.

The amount of the acquisition wasn't disclosed, but snaptell had raised $4m so I suspect the valuation was at least 2x that if not more.

Amazon already has a great mobile app with a similar 'remember' feature.  In a WSJ piece, an Amazon spokesperson said:

Amazon will continue to "work in innovations in search technologies and enabling visual shopping on a range of mobile devices and platforms," said a company spokeswoman. "It's very early days for image recognition based search technology and we believe there is a lot of innovation in visual product search ahead of us."

If you want to read/learn more here are some resources:

• Snaptell blog  
  
• TechCrunch  
• WSJ article (subscription required) 

 If you want to see snaptell in action, I found this Youtube video embedded after the SeekingAlpha blurb:

SeekingAlpha Disclosure- I am long Google and Amazon.  eBay is an investor in ChannelAdvisor

  

Amazon Strategies at Internet Retailer (IRCE) this week

Amazon Strageies readers - while Amazon isn't exhibiting at IRCE this year, they do have some representatives at the show and if you'd like to meet with someone from Amazon to discuss programs like Merchants@/Promerchants, ProductAds, FBA, etc. stop by ChannelAdvisor's booth - 749 and we'll do our best to connect you to the folks that we know will be there.

If you mention you are an Amazon Strategies blog reader we'll also treat you to a free smoothie. 

I'll be at the booth, in meetings and checking out the content, but if you'd like to connect shoot me an email or tweet me.

Also on Wednesday at 11am, there's a talk with Jack Sheng of eforcity and I'm sure Amazon will be a topic of conversation at that as eforcity is one of Amazon's largest third party sellers.

How Amazon develops 'products'/offerings...

On the recent Piper call with Gene Munster, I started to think about a generalized framework for helping to describe and articulate how Amazon seems to develop new offerings.

Once I whiteboarded out how several offerings have progressed based on our experiences at ChannelAdvisor, I was able to see the forest for the trees and a clear 'pattern' emerged. 

Amazon Offering Framework (AOF)

Amazon seems to put offerings out that move through the following roadmap.  At any point in the roadmap, it seems like things can materially accelerate, decelerate or products can get stopped if they don't seem to be making it to the 'next level'

• Beta - Offering is not announced, available to a very closed, NDA list of partners/customers.
• 1.0 product - Offering is available either in a closed program or somewhat hidden/not promoted on the site.  Generally the offering is under the radar. 
• 2.0 product - The offering is available in an open fashion, easily found on the site, but still not heavily promoted.  
• 3.0 product - At this point the offering is tested, works and is ready to 'ramp'. Ramp in the Amazon world can mean a variety of things such as: 
  • Increased site 'customer' exposure 
  • Increased site 'buyer traffic' exposure
  • Increased category adoption (e.g. started in Cat1 and is now in Cat1-X) 
  • Actual promotional exposure
•   4.0 product/ platform - This is the most recent, and in my mind most interesting, stage where Amazon is starting to take on-site offerings, technologies, etc. and then opening them up as a platform.  

  The last phase is very interesting because it allows Amazon to not only open up the technology to outside developers who can inject a ton of innovation, but also Amazon frequently 'unbundles' the technology to off-Amazon companies as well.

Platform examples

Amazon has three examples now, that I'm aware of that while aren't directly applicable to retailer-readers of this blog, they bear watching as I suspect Amazon will apply the model to it's more retailer-focused offerings.

• Amazon S3 - Simple Storage Service - S3 essentially takes Amazon's internal digital asset storage mechanism and opens it up to any third party.  Thus the same Amazon technology that hosts their product images and what-not is open to the World.
• Amazon EC2 - Elastic Computing - Amazon has some amazing cloud/datacenter technology and  they have opened this up to the World.  We are starting to use this at ChannelAdvisor with some great results.

There are others out there, but my point is this:  Think about everything Amazon does as being a little Lego building block that at first is part of the bigger Amazon Lego creation.  But then Amazon can selectively take those little building blocks and 'patform-ize' them.

The implications can be pretty amazing if you think about it:

• What if Amazon platform-ized Prime?  Any retailer could offer prime to their buyers and there could be scheme for rewarding retailers/associates that drive Prime signups.  Prime could go from a great Amazon idea, to a near-internet-wide free shipping subscription program.
• Amazon payments - What if Amazon decouples payments in a more meaningful way?  Over night they could have the number 2 payment system behind PayPal and take a serious run at those guys. 
• What about the review and recommendation systems? Retailers would LOVE to be able to integrate those systems, and maybe even the content, onto their sites. 

Ok enough dreaming for now, now that we've established the AOF let's review the offerings we're tracking on the blog here and put a stake in the ground of where we think these offerings are today.

Later this week we'll update you on the trade-in programs and some interesting things we've seen/noted with Prime.  As we update these programs we'll track their status in the AOF and let you know if there is any movement - up, down or sideways.

Applying the AOF to existing Amazon offerings.

With this new AOF model in mind, let's go through the exercise of applying the model to the various phases of the framework (note these are in order of least to most mature by our reckoning).

Offering	Status	Comments
Vitamin C	Beta Product	Not announced/available - rumored at this point
Payments/Checkout	1.0 Product	Very under the radar
Private Label products	1.0 Product	Definitely under the radar
Trade-In (post coming soon)	1.5 Product	Exapnding categories, not quite a 2.0 offering yet, but heading there
FBA - Fulfillment by Amazon	2.0 Product	Ramping nicely
ProductAds	2.0 Product	Starting to really ramp thanks to increased on-Amazon exposure
Prime	2.5 Product	Starting to promote - (blog post coming)
Pro merchants / Merchants@	3.0 product	Mature - on Amazon only - offering

SeekingAlpha Disclosure - I am long Amazon+Google, eBay is an investor in ChannelAdvisor.

Holy Private Labels Batman! Pinzon is not alone....

Last week, we blogged about the Amazon private label - Pinzon.  Since then several folks have pointed out that Amazon has many other private label brands with the most known being Strathwood which has patio furniture.  You can see the Strathwood store here on Amazon where there are about 350 items for sale. 

One data point is an anomaly, two is a trend and three could point to a micro-private-label brand strategy.  What if Amazon has a bunch of these flying under the radar?  Well, we did some more digging and found several more brands that Amazon has registered trademarks for (thanks USPTO!) that are a little bit more 'stealthy' and I've never seen covered before.

First it took a while to figure this out because the marks are not registered to Amazon but to a subsidiary called "Amazon Technologies, Inc." that uses a Reno, NV address. For example, this is what the Strathwood entry looks like in the trademark DB:

There are many in here that don't make sense or are not in use as private labels.  For example, Amazon seems to hold a trademark on "Tool Crib of the North", but there is no product with that name on Amazon and there's this company that sells under that name = and is part of "Acme Tool" - Hmmmm. Yet, Amazon does have a micro-site at toolcrib.amazon.com, but no private label as best I can find.  There are some that are sub-companies that I didn't know about like createspace.com - a lulu.com competitor I didn't know that Amazon had (but could have easily overlooked as I don't follow that part of the World very closely).  There are also some random Amazon Blogs I didn't know about like Wag Reflex.

All that being said, we did find several other private labels:

Denali Tools:

 

-Amazon seems to have about 50 private label tool/home improvement items from a private label called Denali. This private label takes its name from Mount McKinley aka "the Great one" that is the heart of Denali National park in Alaska.  I'm no geography guru, but seems pretty darn far way from the Amazon - must be a favorite adventure spot for Bezos or at least a tool buyer.

Pike Street - This one seems to have a little overlap with Pinzon in the Home and Garden category. Pike Street is clearly a tip of the hat to the local Seattle tourist destination AND original home of Starbucks I must add.  Pike Street offers about 150 items in the bedding and bath category.

This Pike Street "Softie"looks like it is set to take on the world-famous Snuggie (!  If they had Bezos in one reading his Kindle I'd be all over this puppy, but alas this old-school lady is doing some kind of crossword.

So to recap the Amazon private labels that we have found so far.

1. Pinzon - 600 home and garden items (some bed and bath that overlaps with Pike)
2. Strathwood -  350 furniture items
3. Dinali -  50 tools
4. Pike Street -  150 bedding/bath items (and Softie!)

So that's four brands with about 1200 different products currently being offered via private label , that we know about.  We'll keep an eye on this trend on a regular basis and by all means let us know if you think you've found another 'under the radar' Amazon private label brand.

SeekingAlpha disclosure - I am long Amazon, Google and eBay is an investor in ChannelAdvisor

ProductAds webinar on June 24th

Amazon is hosting a free webinar on ProductAds June 24th at 1pm EDT, 10am PDT.  You can register for the Webinar here.

As I mentioned on the Piper call, this has become a major player in the comparison shopping world and for those interested in selling on Amazon is an interesting option to consider.

You can register here and the blurb for the webinar follows:

Learn how to advertise your products to Amazon.com customers and drive traffic to your website. 

Product Ads is a cost-per-click advertising program that puts your products in front of millions of Amazon.com customers. Simply upload your product catalog and set your bids and budget. Amazon will display your ads in highly targeted placements. When customers are interested in buying your product they click through to your Web site and purchase directly from you.   

This webinar will give you an overview of Product Ads and show you how to optimize your ads. 

Your website must have online checkout to participate in the Product Ads program.  The program is not currently available in the Amazon categories Books, DVD, Music, Digital Downloads, Automotive, Grocery, Pet Supplies or  Industrial.  Product Ads is only available today to US businesses to advertise on Amazon.com.

Amazon quietly launches private label - Pinzon

I was alerted today of an interesting Amazon development that's been under the radar for a while, but more and more people are noticing the success of. Amazon has quietly launched a private label, where they manufacture and sell products, under the Pinzon brand.

If you go to www.pinzon.com, it is a redirect to this Pinzon page on Amazon where it is mentioned that Pinzon is a manufacturer of bath towels, sheet sets, furniture and kitchen gadgets.  

Here's the exact verbage they use:

Invite Amazon.com's Pinzon products into your kitchen and home for their form and function, and experience their style, craftsmanship, and value. We travel the world to find the best materials and designs for Pinzon products and use the most sensible manufacturing methods. We thoroughly test each Pinzon item and rely on feedback from our customers to help us deliver the highest quality. Check out all of our Pinzon products, including bedding, towels, and cook’s tools, and you’ll find something for all occasions at the best values. With a selection that continues to grow, the Pinzon brand is set to become a part of your lifestyle.

The name Pinzon is another clue that this is an Amazon brand.  Vicente Yáñez Pinzón was a Spanish explorer that discovered the Amazon river from which Amazon, of course, draws its name.

For a first foray into the 'private label' world, Pinzon is pretty expansive.  This search indicates there are 551 different products available today.

Interestingly there's a vibrant Pinzon market on eBay - currently there are 100 items for sale.

Seeking Alpha Disclosure I am long Amazon and Google.  eBay is an investor in ChannelAdvisor.