Seattle – It’s already been a busy year for Amazon.com and there’s still another six months to go.
Since January the nation’s No. 1 online CE seller has:
*introduced its first set-top smart-TV box;
*added HBO programming to its selection of Prime streaming video;
*launched an online wearables store;
*expanded its Sunday delivery service;
*provided Prime members with free access to a million songs;
*tripled its Appstore selection year-over-year to more than 240,000 apps and games;
*launched its first proprietary mobile phone, and;
*became the ninth-largest U.S. retailer in total domestic sales, according to the National Retail Federation (NRF), cracking the Top 10 for the first time.
Sharing the pressure of an encore performance in the back-half of 2014 is Ben Hartman, VP of Amazon’s consumer electronics business. While Hartman wouldn’t reveal all the holiday tricks up his sleeve, he did share his outlook for the fourth quarter and the CE industry with TWICE:
TWICE:What are your business goals for 2014?
Ben Hartman, Amazon.com: Our mission has always been to be Earth’s most customer-centric company where people can find and discover anything they want to buy online. We start with the customer and work backwards, and our focus is to give our customers more of what they want – the broadest selection of products at a great value with fast and free shipping.
Within consumer electronics specifically, customers are benefiting from new product innovations, integration with digital media, and more retail transparency. We are focused on helping customers discover, research, and shop the latest technology products, and also improving the way customers can make these devices an integral part of their daily lives; for example, with seamless access to books, music, movies, shopping and photo storage.
TWICE:What is your outlook for the back-half and holiday, for both the CE industry in general and your business in particular? Will consumer sentiment support robust CE demand?
Hartman: We’ve seen steady growth and continued customer interest in CE products. We think there are a lot of new innovations for customers to be excited about this holiday season including curved TVs, streaming media players, mobile devices, wireless headphones, wireless multi-room sound systems, fitness wearables and integration with digital content across many products.
We don’t know how many people will shop on Amazon.com this holiday season, but we know that customers enjoy great values on a broad selection of products, reading customer reviews, conducting research, and getting products with fast and free shipping directly to their homes.
TWICE:Will Ultra HD TV reach mainstream status in Q4?
Hartman: We expect 4K to make further steps towards mainstream status this fall with great products at more accessible price points.
TWICE:Will wearables be the breakout hit of Holiday 2014?
Hartman: It is still day one for wearable technology, and we look forward to seeing which products and new applications will spark wide customer interest. Wearable technology is an exciting category with rapid innovation and our customers are increasingly coming to Amazon to shop and learn about these devices.
We’ve seen several innovative products that address customer needs, such as fitness trackers, smart glasses and smart watches. As consumers continue to turn to technology to assist their everyday lives and needs in different ways, we expect wearable technology will continue to grow in popularity with consumers.
We are already seeing a number of devices popular with Amazon customers including fitness products like Misfit Shine and Garmin Vivofit, action cameras like the GoPro, and smart watches like the Samsung Galaxy Gear 2.
In April, we launched our Wearable Technology Store. Through the store, customers can find a wide selection of the latest wearable products and learn more about wearable technology through videos, comparison guides, and advanced product pages to help them make informed buying decisions.
TWICE:How will Apple’s Beats acquisition affect the headphone category?
Hartman: As mobile devices continue to become ingrained in consumer’s lives and consumers increasingly adopt streaming music services like Prime Music, iHeartRadio and others, we anticipate continued demand for well-designed headphones that deliver both high-quality audio and style to fit the consumer’s lifestyle. We believe Beats will continue their innovation leadership in the headphones category – which we’ve seen with the 2014 launches for the Bluetooth Studio Wireless and Powerbeats2 Wireless headphones – and other brands will also look for ways to innovate and experiment with how people enjoy music.
TWICE: Can you compete effectively in the growing home automation and wireless multi-room audio categories without physical demos?
Hartman: Amazon is a central place where people turn for detailed product information, trusted customer reviews and competitive prices on a broad selection of products. ComScore and others have found that most customers begin their CE shopping online and start at Amazon more than anywhere else, regardless of their ultimate purchase channel. The way customers shop has changed – customers now look to a variety of resources when making purchasing decisions.
We have an incredible base of customers – they are smart, educated and sophisticated about technology. For years, Amazon has been selling products that have been traditionally thought of as requiring live interaction – diamonds, jewelry, TVs, apparel, footwear and so forth – and we’ve been successful in doing so.
The home automation and wireless multi-room audio spaces are no exception. For example, brands such as Nest, Dropcam, and Sonos offer several of the most popular products on Amazon.com. Different than asking a salesperson, Amazon customers use trusted customer reviews and detailed and authoritative content to learn about new technologies. Other resources for customers include educational videos, buying guides, and detailed product information.
Within wireless audio specifically, Amazon.com also offers Prime Music and the Amazon Music app so customers can stream music within the home. Amazon is making it easy by offering an end-to-end experience for customers to discover, learn, buy and stream music after the purchase.
TWICE:Chains stores including Best Buy and Walmart have been committing increased resources to their e-commerce development in an attempt to close the gap with Amazon. What are you doing to maintain your online lead in CE?
Hartman: We’re not focused on other companies. We’re focused on our customers and we work tirelessly innovating on their behalf to provide the best customer experience, and we keep our standards high.
The response from customers has been that they love shopping the widest selection of high-quality products, offered at a great value, in the most convenient fashion and with fast, free shipping. We believe those are the things that customers want and if we focus on providing those three things, our customers will be happy.
With many happy customers, Amazon has found that vendors are excited about partnering to delight customers with innovative new products and improved overall value.
TWICE:Does your business enjoy a halo effect from the introductions of proprietary Amazon hardware, the new Prime music service, and the expanding app selection?
Hartman: Amazon’s digital content offerings are creating new opportunities to partner with our vendors on building long-term relationships with customers that continue after the original sale of a physical device. Amazon customers and Amazon Prime customers are looking to purchase electronic devices that are compatible with Amazon Instant Video, Prime Instant Video, Amazon Music and Kindle books, so they have instant and seamless access to the content they already own as well as easy access to new content.
As an example, Prime Instant Video and Prime Music provide Amazon Prime members with unlimited access to tens of thousands of movies and TV episodes and more than a million songs for no additional cost, and CE devices with streaming capabilities are popular sellers among Prime customers.
Amazon’s digital content – books, music and video – offers the best cross-platform interoperability. There are Amazon apps available on hundreds of devices and platforms so customers can access content anytime, anywhere. We aren’t going to lock customers into an ecosystem, we’re all about choice – choice to buy physical or digital music, videos and books, and choice about what device to listen, watch and read it on. That’s great news for customers who love electronics products, and for manufacturers that want to engage with these enthusiasts.