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  • feedwordpress 13:44:36 on 2018/10/10 Permalink
    Tags: , , Internet, , , , merchandising, shopping   

    Amazon And The Bridge Too Far 

    Yesterday, I lost it over a hangnail and a two-dollar bottle of hydrogen peroxide.

    You know when a hangnail gets angry, and a tiny red ball of pain settles in for a party on the side of your finger? Well, yeah. That was me last night. My usual solution is to stick said finger into a bottle of peroxide for a good long soak. But we were out of the stuff, so, as has become my habit, I turned to Amazon. And that’s when things not only got weird, they got manipulative. Sure, I’ve been ambiently aware of Amazon’s algorithmic pricing and merchandising practices, but last night, the raw power of the company’s control over my routine purchases was on full display.

    There’s literally no company in the world with better data about online purchasing than Amazon. So studying how and where it lures a shopper through a purchase process is a worthy exercise. This particular one left a terrible taste in my mouth – one I don’t think I’ll ever shake.

    First the detail. Take a look at my search results for “Hydrogen Peroxide” on Amazon. I’ve annotated them with red text and arrows:

    As you can see, the most eye catching suggestions – the four featured panels with large images – are all Amazon brands. Big red flag. But Amazon knows sophisticated shoppers like me are suspicious of those in house suggestions, so it’s included a similar product in the space below its own brands (we’ll get to that in a minute).

    Above the featured items are ads: sponsored listings that are not Amazon brands, which means the advertiser (a small player named “Blubonic Industries”) is paying Amazon to get ahead of the company’s own promotional power. Either way, Amazon makes money. Second red flag.

    By now, I’ve decided I’m not interested in either the sponsored brands at the top, or Amazon’s four featured brands, because, well, I don’t like to be so baldly steered into buying Amazon’s stuff. Then again, before I move down to the results below, I do notice something rather amazing – Amazon’s familiar brown bottle of peroxide is really, really cheap – as in, $1.29 cheap. There’s even a helpful per oz. calculation next to the price, screaming: this shit is eight pennies an ounce cheap!

    Well, I’m almost sold, but because I hate to be directed into purchases, I’m still going to consider that similar brown bottle below, the one with the red label. Amazon knows this, of course. It’s merchandising 101 – make sure you give the consumer choices, but also, make sure the most profitable choice is presented in such a way as to win the day.

    So my eye moves down the page to check out the second bottle. It’s from Swan, a brand I’ve vaguely heard of. Then I check its price.

    Nine dollars and sixty nine cents.

    Which would you buy? After all, this is a staple, a basic, a chemical compound. And you trust Amazon to get shit right, don’t you? I mean, a buck and change – nearly nine times cheaper? What a deal!

    So…my eyes revert to  Amazon’s blue labeled bottle. I mean…it wouldn’t have a four-star plus review if it burned your skin, right? And that’s when I notice the tiny icon next to it, which looks like this:

    What’s this? Is this yet another annoying subscription service? Ever since we moved to New York, my wife and I have tried to figure out Amazon’s subscription services (Fresh? Pantry? Prime Now? Whole Foods Delivery? Who knows?!). I’m already deeply suspicious of any attempt by Amazon to lure me into paying them monthly for a service that I don’t understand.

    But…a buck twenty nine! So I click on the bottle, and the landing page is super clean, and there’s no obvious Prime Pantry mention. Plus, it turns out, that bottle from Amazon is the Whole Foods generic brand, which for whatever reason seems a bit better than a generic Amazon brand. Did I just get lucky? Maybe I can just get some super cheap chemicals delivered in a day to my door, and my annoying hangnail will be a thing of the past soon enough….Right?

    Here’s the landing page:

    Looks great, the price is amazing, but…Uh oh. I can’t get this bottle of peroxide until Sunday. By then, I’ve likely lost my finger to a flesh eating bacteria. As I feared, this bottle is nothing more than a baited fish hook for one of Amazon’s subscription offers – which I find out, will cost somewhere between five and thirteen bucks a month. I’ve signed up for Prime Pantry by mistake in the past, and it wasn’t a smooth or enjoyable experience. No thanks. I click back to the original search results. Seems to me Amazon is gaming the shipping deals.

    Well of course it is.  I’m no longer a happy Amazon customer at this point. Now I’m annoyed.

    But what’s this? If I scroll down below the $9.69 bottle, there’s another choice, also from Swan, and, it seems, exactly the same, if one is to judge just by the image (and we do judge just from the images, let’s just admit it). This one costs almost half as much as the one above it. What’s going on?! Here’s an annotated screen shot:

    As you can see, there’s a lot going on. I’ve narrowed my choice down to two non-Amazon brands. They look nearly identical. The most significant difference, at least in terms of the information provided to me by Amazon, is the price – the top bottle is nearly twice as expensive as the bottom one. But the top bottle has a major benefit: I can get it nearly immediately! The bottom one makes me wait a day. Is the wait worth four or five bucks? Hmm.

    Also confounding: The bottom bottle has its price broken out on a per ounce basis – 32 cents, exactly four times more than the 8 cents-an-ounce bottle I just looked at from Amazon’s Prime Pantry. Ouch! Now I’m really annoyed, and confused. My eyes dart back up to the $9.69 bottle. As I’ve shown with the empty red circle, there’s….no per-ounce breakdown shown by Amazon. It does tell me that this particular bottle is 32 ounces, whereas the bottom one is 16 ounces.

    But why not do the math for me? A quick calculation shows that the top bottle comes out to about 30 cents an ounce – two cents less than the bottom bottle. Why not show that fact?

    This, folks, this is algorithmic merchandising at its finest.

    Amazon knows exactly how many clicks it’s going to take for me to reach shopping fatigue. Not “on average for all shoppers,” or even “on average for each shopper who’s ever considered a bottle of hydrogen peroxide.” Amazon knows all of that, of course, but it also  knows exactly how long it takes ME to get fatigued, to enter what I like to call “fuck it” mode. As in, “fuck it, I’m tired of this bullshit, I want to get back to the rest of my life. I’m going to buy one of these bottles.”

    And because there’s no per-ounce breakdown of the 32-ounce bottle, and because that makes me suspicious of it, and because hell, who ever needs 32 ounces of hydrogen peroxide anyway, well, I’m just going to buy the $5 one.

    Ca-ching! Amazon just made a nearly seven percent markup on my purchase. It took five clicks, 15 seconds, and a vast architecture of data and algorithmic mastery to make that profit. Each and every time we purchase something on Amazon, that machinery is engaged in the background, guiding us through choices which insure the company remains the trillion dollar behemoth we know and…

    Love?

    ***

    Do you love Amazon anymore? For that matter, do you love Facebook, Google, or Twitter? Interactions like the one I’ve detailed above are starting to chip away at that presumption. Personally, I’ve gone from cheerleader to skeptic over the past few years, and I’m broken out into full-blown critic over the last twelve months. I no longer trust Amazon to have my best interests at heart. I’ve lost any trust that Facebook or Twitter can deliver me a public square representative of my democracy. I’ve given up on Google delivering me search results that are truly “organic.” And YouTube? Point solution, at best. I can’t possibly trust the autoplay feature to do much more than waste my time.

    What’s happened to our beloved tech icons, and what are the implications of this lost trust? In future posts, I plan on thinking out loud on that topic. I hope you’ll join me. In the meantime, I think I’ll stroll down to CVS and buy myself another bottle of hydrogen peroxide. By the time Amazon’s comes, I’m sure my hangnail will be a distant memory. But that taste in my mouth? That’s going to remain.

     
  • feedwordpress 13:56:53 on 2018/09/27 Permalink
    Tags: , infrastructure, Internet, , leadership, ,   

    Cloudflare and the Art of Breaching Moats 

    Cloudflare founders Matthew Prince and Michelle Zatlyn (image)

    The company could seek rent. Instead, it finds false market barriers and merrily breaches them.

    (Cross posted from NewCo Shift)

    We don’t usually cover news here at NewCo Shift, this is more of a place for analysis and Thinking Out Loud. And it’s rare that one company appears more than once here in any given year. But today – again – Cloudflare has upended an important piece of Internet’s real estate, and it’s just too rich to not note the why of it.

    So first the news. To celebrate the company’s eight birthday, Cloudflare is announcing the launch of a domain registrar. And because the company operates at massive scale, and can afford to do things most companies simply can’t (or won’t – looking at you, Google, Amazon, Facebook) – the company is offering domains *at cost.* In other words, Cloudflare isn’t making one red cent when you register a domain with them. What they pay to register a domain (and yes, that number is fixed, and the same for all domain registrars), is what you pay to register a domain.

    Go ahead, go sell (or short) your GoDaddy stock. I’ll wait.

    OK, you back? Look, I’m not writing this post because I think the news is *that* exciting, though I’ll tell you, I’ve not found many folks who love their domain registrar. I certainly don’t. Most of them are experts at confusing you, at upcharging you, and at scaring you that you’re about to either lose your domain or miss some important feature you didn’t know you want or need. I pay an average of about 15-20 bucks for each of the domains I own each year. Cloudflare’s price is about eight dollars.

    I own close to 50 domains. That means I’ll save nearly $400 a year when I move all my domains to Cloudflare. That’s real cheddar.

    But the real reason I’m writing this post is to point out what a merry market discombobulator Cloudflare has become. This is a company that operates at Google scale, is independent (it’s on a path to an IPO and has raised hundreds of millions of dollars), has a core business model that drives profitable growth (it’s a content distribution network and secure infrastructure vendor), and most importantly, a philosophy which is utterly unique in today’s venal, steroidal capital markets (more on that in a second).

    Cloudflare’s scale and financial power (it’s privately valued at what I am told is well past $5 billion) allow it to do things most companies simply can’t. Things like…rolling out a Domain Name System that protects your data from prying ISP eyes, for free, because it can. Or leading an alliance of bandwidth providers dedicated to eliminate markups on peering (it’s complicated, but net net, it means less costs for everyone).  Or totally upending the sclerotic economics of Over the Top (OTT) streaming.

    With every one of these steps, Cloudflare is doing two things: First, it’s refusing to view the Internet as property to be cornered, as real estate where infrastructure owners can camp out and collect rent. That’s utterly unheard of in a world where Amazon has cornered commerce and hosting, Facebook has cornered social attention, Google has cornered search, and AT&T, Comcast and Verizon are competing to be as walled as a garden can possibly be. Secondly, Cloudflare is actively exercising a core philosophy which can be honestly described as embracing the best (and most earnest) values of Internet 1.0: The web should be open, freely accessible, and an equal playing field upon which anyone can frolic.

    Companies like this are very, very hard to find at scale. At some point, most firms with a “make the world a better place” philosophy succumb to the reality of Peter Theil’s maxim: Every world-beating company must be a rent-extracting monopoly.   Maybe I’m missing something, so please, name me one (in the tech space anyway) that isn’t operating under this assumption?

    Cloudflare is proof that great companies can also be forces for good, down to the molecules of their DNA. This is a company that defines what I mean when I use the word “NewCo.” I can’t wait to see what they do next. And, of course, they’re not perfect, and sure, this post might look naive in a few years.

    But gosh, I sure hope it won’t. The world needs more Cloudflares, if only to remind us that it’s possible to move past the exhaustingly brutalist architecture we’ve managed to build around ourselves. Perhaps in fact we can trust ourselves to do what’s right for more than just us, more than just our company, more than just our shareholders. Perhaps our industry can dream to reach just a bit further, and imagine we are agents of larger purpose; and that, if we practice enough, we might earn the right to become what we’ve always imagined we could be, over these so many years: A force for good.

    Lord knows it’s been a while since that’s been true. Right?

     
  • feedwordpress 05:50:11 on 2016/03/08 Permalink
    Tags: chiclets, Internet, , , , ,   

    Metaservices FTW! 

    The post Metaservices FTW! appeared first on John Battelle's Search Blog.

    Chiclets

    Way back when — well, a few years back anyway— I wrote a series of posts around the idea of “metaservices.” As I mused, I engaged in a bit of derision around the current state (at that point) of the mobile ecosystem, calling it “chiclet-ized” — silos of useful data without a true Internet between them. You know, like individually wrapped cubes of shiny, colored gum that you had to chew one at a time.

    I suggested that we needed a connective layer between all those chiclets, letting information flow between all those amazing services.

    It’s happening. First, with deep linking, which has successfully integrated the apps, the mobile OS via notification layer, email, and the broader mobile and desktop web. And now with an emerging, multi-tasking layer of user command and control based on the simplest of interfaces: Text.

    Check out Prompt, which TechCrunch aptly called “a command line for the real world.” Prompt is about two things. First, integrations with useful mobile services — the chiclets. And second, a simple, social, text-like interface that allows us to get shit done. Text Uber, get a car. Text Nest, turn your thermostat down. Text Google, get a search result. Text Facebook, post a status update. Text any smart service, get shit done.

    Bots are at the center of this interface — simple, rules-based bots that take our commands, execute them, and tell us of the result. It’s not rocket science, and that’s kind of the point.

    It’s great. It’s right. It’s going to work — but only if we remember the other side of the coin. Links should go both ways, after all. If Prompt and others like it want to win, they have to become a clearing house for both data going out — our commands — as well as data coming in. It’s one thing to tell our bots and services what to do. It’s another to allow them to talk to each other, and to instrument a platform that gives us control of how they might combine. Once we light that candle, the Internet will shift to another level entirely.

    The post Metaservices FTW! appeared first on John Battelle's Search Blog.

     
  • feedwordpress 03:38:40 on 2016/01/13 Permalink
    Tags: back linking, Internet, , , , ,   

    Mobile Gets a Back Button 

    The post Mobile Gets a Back Button appeared first on John Battelle's Search Blog.

    Screen Shot 2016-01-12 at 6.32.45 PMI just opened an email on my phone. It was from a fellow I don’t know, inviting me to an event I’d never heard of. Intrigued, I clicked on the fellow’s LinkedIn, which was part of his email signature.

    That link opened the LinkedIn app on my phone. In the fellow’s LI feed was another link, this one to a tweet he had mentioned in his feed. The tweet happened to be from a person I know, so I clicked on it, and the Twitter app opened on my phone. I read the tweet, then pressed the back button and….

    Wait, the WHAT? The back button? But…back buttons only exist in a Browser, on the PC Web, right?

    Yes, that used to be true, but finally, after years of chicletized, silo’d apps that refuse to talk to one another, finally, the chocolate is meeting the peanut butter. The mobile operating sysem — well, Android anyway — is finally acting like a big-ass web browser, only better — with sensors, location data, and other contextual awareness.

    It doesn’t happen a lot, but thanks to deep linking and the inevitable need of commerce to connect and convert, it’s happening more and more, and it represents the future of mobile. The chocolaty goodness of the linked web is merging with the peanut-buttery awesomeness of mobile devices.

    It’s about time.

    The post Mobile Gets a Back Button appeared first on John Battelle's Search Blog.

     
  • nmw 14:16:56 on 2015/01/12 Permalink
    Tags: , application, applications, , business model, business models, Internet, , revenue, revenues, , ,   

    In-App Commerce 

    App stores stifle innovation – they are damage, and the Internet will eventually route around them.

    http://battellemedia.com/archives/2015/01/3-waves-mobile-revenue.php

     
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