Most discussions of Amazon’s business end up referencing the Flywheel, as shown below:
It depicts the self-reinforcing nature of Amazon’s business — great customer experience drives traffic, attracts sellers, which builds selection, which increases the customer experience. And attached to all of that is an accelerating factor, which is the role volume plays in the flywheel. Essentially, greater volumes spreads overhead across a greater number of transactions, which leads to lower prices, which … you guessed it, improves the customer experience.
The flywheel is great, as far as it goes. But it doesn’t go anywhere near far enough to reflect Amazon’s business strategy as it stands today. Essentially, the flywheel reflects how an ecommerce, transaction business operates.
It totally leaves out Prime, though. Of course, Prime increases customer attachment via lower shipping costs, which directly feeds into increased order volumes, which does reinforce the flywheel. And I certainly demonstrate that power; I am a Prime member and had over 250 orders during 2017 — and that was down over 50 orders from 2016!
Clearly, Amazon is pushing Prime. Here is an example of an Amazon shipping package I received today. Nothing subtle about this message:
But, as many have noted, Prime encompasses much more than cheaper ecommerce. There’s another element of Prime that Amazon is really revving up now, which indicates just how powerfully Amazon is leveraging network effects across its total offering, the Zeitgeist that is Amazon as experienced as a customer.
I speak of Amazon video and how it’s creeping into some unexpected places, all in the service of making Prime, and therefore Amazon, more … sticky. Engaging. Primary in the mind of the customer.
Let me share how I encountered this and how powerfully it illustrates the uber-flywheel that is Amazon today.
Let me begin by saying I like movies. A lot. I go to the movies a ton, and I watch a lot of video at home. In contrast to many, I watch just as much Amazon video as Netflix. I find that Amazon offers a lot of interesting programming, carries a lot of British shows, and, somehow, seems to have made peace with legacy cable and network channels.
So I was intrigued when I received an Amazon box and instead of the usual beige color, it instead carried a bright red advertisement for The Greatest Showman. I found it so intriguing that I took a picture and posted it to my social channels:
A day or so later I was slicing up the box for recycling and noticed something I overlooked earlier: a statement on the bottom of the box giving me some instructions:
It took me a couple of minutes to figure out what this was telling me to do: bring up the Amazon app on my phone, click on the camera button, and point the phone at the picture of Hugh Jackman on the box.
When I did this, the app scanned the Jackman figure, and then something amazing happened. It displayed a 360 degree VR video of the climactic ensemble song and dance from the movie. Here is a screenshot of the video:
And if one looks at the app camera splashscreen, one can see that Greatest Showman is one of the icons:
And it worked. I was aware of the movie, but wasn’t sure I wanted to see it. But after all this, I decided I definitely wanted to see it. And I did. I really liked it. It reminded me of La La Land — a reimagining of the classic movie musical, brought up to date with today’s ensemble choreography and music style. I’d definitely recommend it.
But what struck me about this was the network effect within the Amazon ecosystem to drive me to the theater:
In thinking about this, I had some questions:
All of this indicates that Amazon is coordinating across different workgroups to roll out interesting offerings. This is what I mean by the Amazon network effect — there’s more value achieved when all the different workgroups collaborate in these kind of initiatives.
Curiously, I found that this entire effort did fall down in one important respect. I assumed that Greatest Showman must be something like last year’s Manchester By the Sea — a movie that was part of the Amazon video ecosystem, so any promotion would ultimately drive increased Prime video views when the movie finally moved out of the theaters and into Prime video.
But no. Greatest Showman has nothing to do with Amazon production or funding. In fact, at the beginning of the showing I attended, an intro video with Hugh Jackman and Director Michael Gracey had them thanking the audience for coming to see the movie the way movies are meant to be seen — on the big screen (I have to say that it is a heady, sensual experience when seen in that environment).
Frankly, I’m kind of surprised. I would have thought that, considering the amount of work such a cross-organization kind of collaboration would require, it would be toward the end of pushing an Amazon effort. Instead, on the face of it, this just seems like an advertising deal. If I were a betting man, I’d bet that Greatest Showman is going to end up on Amazon Prime video, or this effort is a stalking horse for ongoing future cross-organization efforts like it.
Nevertheless, Amazon’s Greatest Showman set of intricately connected pieces, directed toward building awareness and (presumably) customer motivation, gave me a feel for what today’s Amazon Flywheel is like, and how Prime plays a key part in it.
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