Marc Benioff of Salesforce.com makes some good points (and stretches others) as to the future of cloud computing here, where he refers to Facebook replacing Amazon. Surely most Facebook users look at the tool as a simply as a free social networking site, many times removed from the clear online retail experience at Amazon. Rather than second guessing Marc's thoughts, it seems obvious to me why Amazon should be concerned.
Amazon's added value is it's user reviews section; if there are two identical products - identical picture, price, description - but with differing reviews, you'd be mad or deliberately contrarian to buy the unfavoured product. In fact, a terribly unscientific survey of one revealed that customers would rather pay more for the guarantee of a good product as opposed to facing the hassle of returning a bad product (or even worse, nor returning it).
The only problem with the Amazon reviews section is that a customer is taking a risk by trusting the reviews section at all; it could be skewed deliberately by paid product evangelists, by a particularly bad run off the production line, or by reviewers that aren't the true target market. Because the internet gives a veneer of anonymity (albeit ever thinning) you might never know the product you're about to buy is a total lemon.
Facebook is powerful precisely because we trust those who we befriend, to a degree that depends on our own attitude to trust; we choose who we want in our private community, while our privacy and profile settings tell the rest of the world how much we want to be part of each of their private communities. Therefore a recommendation from a friend (say, from @mcflinbob on a movie, or @euan on a book) counts much more than a faceless Amazon reviewer.
Amazon have tried to add virtual faces to reviewers through their 'real names' qualification; if it's a real name then they're more trustworthy right? Well, not quite; it's still just a name on a page.
Facebook is yet to engage it's user base in retail activity on a mass scale but the sheer numbers involved have the potential to turn webonomics on its head. Google has already proved the power of the virtuous circle with something as simple as search hits, relevancy and advertising; replace with sales, trusted reviewers and profiling and you're into telephone numbers. Should that user base then be mobilised by something - anything, good or bad - and it's a potential stampede toward or away from any product at any time.
So Facebook's community focus makes it powerful and Amazon's next move is a test of it's ability to remain agile in a socially networking world. The platform approach - the approach it should take in my opinion - is to build on it's existing credibility and invite integration with Facebook, Bebo, Digg, Twitter and so on; embed itself into Web 2.0.
After all, in a world dominated by social media, viability and engagement are synonymous.
2 comments:
Very astute observations. I think that you're right that Facebook and Amazon are very different beasts, but I wonder about the true currency of the future.
Could it be that we value "Like" more than we do "$"?
Discuss.
Tony
Very astute yourself.
Value is present on both sides of the buying transaction.
It could be argued that the emotional kick from 'like' is more important than the '$' for the purchaser. Otherwise they'd hold onto their dough.
For the retailer, the 'like' is important only as far as it brings revenue from elsewhere; perhaps the 'like' subsidises another transaction through advertising, or through other sales. If the retailer is using a true free model then the 'like' becomes even more valuable because in a free model, trust is the only thing of value.
So I'd argue that the 'like' is of higher value because it carries with it trust - and that, for me, is the true currency of the future.
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