Business Technology

Tuesday 16 July 2019

Steve Dempsey: New Amazon social media and shopping site will Spark online retail war

'Amazon has a track record of building products based on how online audiences spend their money, not their time.' (stock image)
'Amazon has a track record of building products based on how online audiences spend their money, not their time.' (stock image)
Steve Dempsey

Steve Dempsey

It's been some time since a new social network was launched. Remember the days when it seemed like there was a new kid on the social block every few months and there was a flood of interest in the next big thing?

Aside from the likes of Facebook and Twitter, Google+, Quora, ello, Yik Yak and Foursquare all had their 15 minutes of digital fame. But these days new social networks - and the hype that comes with them - are hard to come by.

Enter Amazon. The online retail giant has just launched a new hybrid social and shopping service called Spark. It's the retail giant's first foray into social media.

Unlike previous social launches, Spark isn't a free-for-all. It's only available to Amazon's paying Prime members in the US who use the brand's iOS app. But if it works, it's bound to be rolled out to greater audiences on other platforms. So what is it?

At first glance, it's an Instagram-style feed of user-generated images and videos. Through tagging, users can click through to products on Amazon and buy anything they like the look of. Aside from making purchases, users can also interact with posts with 'smiles', Amazon's answer to Facebook's 'likes'. Here's how Amazon says it works: "When you first visit Spark, you'll select a few interests and we'll create a feed of personalised content from other Amazon customers with similar interests as you. Shop your feed by tapping on product links or photos with the shopping bag icon, or interact with people by commenting or smiling on their posts. To create a post, scroll to the top of your feed and share a product or story."

So the question is, does anyone want a social network that facilitates impulse buying? Well, it could certainly provide a valuable revenue stream for social influencers and a host of style and lifestyle brands that are active on other social networks. If 95.9 million Instagram users are willing to follow Kylie Jenner on Instagram, some of them are undoubtedly willing to follow her over to Spark, where they'll be able to click through directly to buy products from Jenner's make-up line. If Spark is a success, the big winner will, of course, be Amazon.

But success is dependent on a putting the best foot forward.

So Amazon has paid some publishers and social media influencers to kick-start the process. Interior design site Apartment Therapy posted images of, you guessed it, interior design that linked to Ikea products for sale on Amazon, while tagged with Ikea products for sale on Amazon, for example, while women's lifestyle site PureWow tagged up images about makeup.

These launch partners have reportedly been paid a flat fee for their posts. However, it seems likely that Spark will pivot to a commission-based model similar to Amazon's affiliate programme which sees partners get a cut of every sale that can be attributed to traffic they send to Amazon from their own sites.

And retailers take note; Spark is set to become more than a platform for window-shopping with big brands and big influencers. Amazon will reportedly let customers share reviews they've previously written for products on Spark beginning by the end of July. So it will also become a tool for crowd-sourced ads and recommendations.

Amazon's Spark is a very difficult social network to any that has come before. Your typical social media service builds habit and then profit. It gets a horde of users hooked on its offering and then slowly starts slipping advertising into the mix. Look at Facebook's Messenger app. It has over 1.2 billion daily active users and has only recently has started serving ads to users. But thanks to Amazon's retailing clout and how Spark has been integrated into the existing app, Spark is likely to drive revenue from the get-go. So Spark doesn't have to chase massive scale straight off the bat.

Amazon has a track record of building products based on how online audiences spend their money, not their time.

It's got the Dash button that let's users order products, well, at the push of a button. There's Alexa, which aims to be the operating system for the home and Amazon Prime, which offers streaming media and improved delivery terms. There's also B2B offerings like Amazon Web Services, the video direct programme and Amazon's ad business that allows ads to be targeted to users based on their online shopping habits.

So while Spark may seem like a new direction for the Amazon - ie a way for it to step into the arena of the attention economy - it's probably best seen as a simple extension of its existing footprint of merchants.

If that's Spark's strategic goal, it has huge potential to underpin shopping referrals not just within the Amazon app, but across the internet, whether as a standalone service, a partner for other social networks, or a revenue stream for online publishers.

Sunday Indo Business

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