Lots of people, including myself, have observed that Amazon’s popular Alexa virtual assistant is a genius business tactic because it makes it easy to buy physical and digital stuff from the self-styled “everything store.”
But in an interview with Billboard’s Stephen Witt, Amazon CEO Jeff Bezos actually splashes some cold water on that idea, in response to a question about Amazon’s Echo putting “an Amazon cash register in every house in the country.”
Bezos says “it’s not about that,” and instead that “Alexa is primarily about identifying tasks in the household that would be improved by voice.” Right now, Bezos says, the big applications for Echo are music and home automation with smart appliances like the Nest thermostat or August door lock.
In regards to shopping, Bezos says, Alexa is only really “good for reordering consumables, where you don’t have to make a lot of choices, but most online shopping is going to be facilitated by having a display.” In that way, Bezos is saying, Amazon Echo is a little more like the company’s Dash buttons for reordering brand goods.
Breaking it down, Bezos is indicating that Amazon’s Alexa is still an experiment, in more ways than one. As people build more “skills” for Alexa, they’re still working out how and where it can be useful.
We’re starting to see this in real life, too. Business software firm Atlassian is testing out Alexa in an office setting and Acumatica is trying out Alexa for warehouse inventory management.
Still, Bezos’ comments shake up the conventional wisdom on Alexa’s role in Amazon’s grand strategy. And his views on shopping still being screen-based go a long way toward explaining the rumours that Amazon is working on some kind of Echo device with a tablet-sized screen.
Ultimately, though, Amazon still seems well-positioned with Alexa, even beyond shopping. The company is pushing hard into music, with its own Amazon Prime Music service, and new Spotify competitor, Amazon Music Unlimited.
And while every Alexa “skill” is free today, it seems inevitable that Amazon will create a paid store for them eventually, where the retailer would take a cut of the proceeds. Plus, there’s no reason why Amazon couldn’t make its own Alexa-compatible smart home gear, in line with Bezos’ comments.
Meanwhile, Google and its Google Assistant are going through their own growing pains, with investors expressing concern that the whole notion of voice assistants will hurt its search engine advertising business. But if Bezos is right, and people will need screens for shopping, that creates an opening for Google going forward.