Sep 8, 2017

Will Amazon Disrupt Your Business Using Your Own Customer Data?

P.V. Kannan, Co-founder and CEO

From Its Humble Beginnings As An Online Bookstore, Amazon Has Grown Into A Tech Industry Powerhouse, With More Than $136 Billion In Annual Sales. But Jeff Bezos Is Still Not Satisfied. For A Short Time, Amazon Seemed Content With Its Position Atop The Retail World, However, Recent Moves Have Made The Company’s Interest In World Domination Abundantly Clear. First They Came For The Retailers. Then They Came For Grocers. Then They Came For The Online Ticketers. Yet, I Still Meet With Executives Who Willingly Provide Amazon With Their Customer Data Whether Through Alexa, Amazon Connect Or Aws.


The Acquisition Of Whole Foods Surprised Many People, And Proved That Amazon Will Go Wherever It Thinks It Can Disrupt An Industry And Be Profitable. What Is Stopping Amazon From Branching Out Into Industries Such As Banking, Education, Financial Services, Healthcare, Hospitality, Insurance, Telecommunications, Travel Or Utilities? (Hint: Nothing). If I Were An Executive In A Large Bank, A Major Airline Or A Global Hotel Chain, I Would Be Extremely Wary Of A Company With That Much Clout Having Access To My Customer Data.


Amazon Has A History Of Eating Its Partners, And Has Left A String Of Failed Or Struggling Businesses In Its Wake. Look At What The Company Did To Borders, Toys-R-Us, Target Or Any Number Of Companies That Are Struggling To Exist In The New World Order. In Brad Stone’s Book The Everything Store, He Outlines The Methodical Way In Which Amazon Used The Data That It Collected From Retailers In Order To Go After Them, For Example, Offering More Options Online Than A Retailer Could Carry In Stock. It’s A Compelling Read.


Companies In The Aforementioned Fields Hold A Staggering Amount Of Information On Their Customers. If That Information Were To Fall Into A Competitor’s Hands It Would Be Devastating To The Business, Yet Many Are Willingly Handing It To Amazon. Are These Companies Simply Rolling The Dice, Or Are They Unwittingly Handing Over The Keys To The Crown Jewels?


Amazon’s Contact Center Strategy


Earlier This Year, Amazon Introduced Amazon Connect In An Attempt To Expand Into The Customer Contact Center Business. This Is A Brilliant Move On Their Part, As Contact Centers Are A Mission-Critical Function For Large Enterprises, And They Are The Front Lines Of Handling A Company’s Most Valuable Asset – Its Customers. What Better Way For Amazon To Gain Access To A Business’ Most Valuable Asset?


Amazon’s Approach Is To Promise Businesses That It Can Set Up Connect In Minutes So That Agents Can Take Calls Right Away. It Has Also Released A Set Of Tools For Developers To Easily Build Chatbots, Looking To Take Advantage Of Companies’ White-Hot Interest In The Subject. Running Contact Centers And Building Chatbots? What Could Be Easier?


Only It’s Not That Easy. In Fact, It’s A Lot Harder Than Amazon Bargained For, For A Couple Of Key Reasons:


  • Domain expertise: Other than dealing with its own customers, Amazon has very little understanding of customer journeys. These journeys cross all channels and they span both self-service and assisted service. Furthermore, they vary from industry to industry. A journey for an airline customer is going to be different from that of a bank. Companies looking to serve those industries must understand those differences. Amazon Connect certainly won’t attract retail clients as no retailer in his/her right mind would do business with them.


  • Technology: Writing code that works across both voice and digital channels is extremely challenging, as is technology that automatically escalates a call to a live agent. I’m just scratching the surface. Anyone can build a chatbot, but building an intelligent enterprise-grade chatbot is something few companies can do. The art of human conversation and problem solving is complex and highly non-linear. In contrast to human conversation, most chatbots you read about today are very structured, employing a sequence of fixed, static steps, aka the “happy path,” employing simplistic rules to build out the fixed sequence of steps and force the user down scripted paths. When they can’t handle the conversational complexity necessary for task resolution, consumers are quick to pick up the phone. 


In May, Forrester Analysts @Kate Leggett, @Art Schoeller And @Daniel Hong Wrote A Report Titled “Amazon Connect: Not Yet Ready For Prime Time.” The Report Concluded That Amazon Connect Must Fill Gaps In Order To Be A Viable Enterprise Contact Center Solution. The Key Question Though Is Whether Amazon Can Fill These Gaps, And Whether The Companies It Serves Will Help Them Do It. For Example, Amazon Can Gain A Tremendous Amount Of Insight Into The Airline Industry If It Finds A Client Who’s Willing To Share All Of Its Customer Data.


The Virtual Assistant Strategy


Amazon Also Dominates The Virtual Personal Assistant Market With Alexa And Echo And Is Poised To Extend Its Domination Even Further As It Has Hired Hundreds Of Engineers. If That Weren’t Enough, Amazon Is Poised To Extend Its Reach Through A Partnership With Microsoft’s Cortana. The Strategy Is Also Brilliant – Fill As Many Consumers’ Homes As Possible With A Device That Handles Everything For Them: Banking, Shopping, Travel, Etc. But For Its Land Grab To Be Fully Successful, Amazon Needs Information Through Partnerships With The World’s Largest Companies In Each Field. Is Your Company Willing To Be An Accomplice?


The Next Logical Step Is For Amazon To Tie Its Personal Virtual Assistants To Its Chatbots And Contact Center Agents. With All Of Those Elements Connected, There Would Be Very Little To Stop Amazon From Expanding Into And Disrupting Every Customer-Facing Industry.


The Small, But Growing Resistance

Recently, The Wall Street Journal Published An Article On Companies That Are Fighting Back To Protect Themselves From Amazon. For Example, Some Manufacturers Are Enforcing Minimum Advertised Prices To Make It Harder For Amazon And Other Online Sellers To Undercut Local Merchants, While Others Are Driving Online Shoppers Towards Physical Retail Stores. Companies Such As Brooks, Luxottica And Thule Are Doing This Not Only To Protect Their Brands, But To Protect Their Businesses.


Protecting Your Customer Data

  1. Consider the alternatives: For virtually everything that Amazon does, there’s another company that provides the same service. There are tons of companies that you know will not have designs on your business. For example, Microsoft offers cloud services with Azure, and you know they won’t come after your business. IBM Cloud is also a very strong alternative.
  2.  Get a rock-solid agreement: If you must do business with Amazon, ensure that you have a water-tight agreement that makes it crystal clear that Amazon can’t use your data for any purpose other than what you specify. This agreement should include abstracting data for things such as building out customer journeys. Even abstracted data on how banking customers are dealing with customer service issues could help Amazon build its own online bank. Travel journeys could help it build an online travel service. You get the idea.


Every Industry Is Ripe For Disruption. Digital Disruptors Challenge Your Business Model As They Engage Your Customers In New Ways. They Can Quickly Win Market Share And Become Critical Players Within A Very Short Time. That Has Never Been Truer For Any Company Than It Is For Amazon Right Now.