Amazon Taking on Venmo; A Tech Firm or a Retail Firm?

RetailTechNews’ weekly Amazon Watch brings you some of the company’s biggest moves from the past seven days, analysing how the giant is revolutionising the retail space. In this week’s edition: Amazon Taking on Venmo; A tech firm or a retail firm?; and No ads for Alexa.

Amazon Taking on Venmo

Amazon is working on a person-to-person payment capability that could be used in combination with its Alexa virtual assistant, according to the Wall Street Journal. With such a service, a user presumably would be able to ask Alexa to send an amount of money to another person from an account the user has stored with Amazon, the report speculated.

An Amazon peer-to-peer payment offering would compete directly with Venmo, which is owned by PayPal. Venmo processed more than USD$10bn worth of person-to-person payments in the fourth quarter of 2017, and is believed to have roughly seven million monthly users.

Amazon certainly isn’t new to the digital payments game. Amazon Pay is already used by millions of customers and is accepted at some online retailers other than Amazon. Peer-to-peer payments would be an adjacent, but natural accompaniment, to Amazon Pay. As peer-to-peer juggernaut Venmo has begun to target retailers, it makes a lot of sense for Amazon to get into Venmo’s native market.

With Alexa’s dominance of the smart-speaker market, it would be hard to imagine an Amazon person-to-person lending platform not having a huge customer base, as integrations with the speaker would be easier than those offered by the likes on Venmo.

A Tech Firm or a Retail Firm?

Amazon’s R&D spend rose 41% to USD$22.6bn (£16bn) in 2017. Research and development spending by tech companies isn’t much of a head-turner, but this supremacy underscores how the e-commerce giant is at least as much of a tech company as it is a retailer.

The company has rivals scrambling to keep apace with its checkout-free Amazon Go store. It has also been exploring niche efforts, like developing tech solutions for seniors, and it runs the largest cloud services business in the world, a highly profitable unit for Amazon compared to its retail arm, which operates on thin margins.  

Amazon’s Alexa voice assistant, which is dominating in the emerging space, is likely a major beneficiary of its recent R&D investments. If Amazon can refine Alexa, and control the smart-speaker market over the coming years, then shopping on this platform will increase, allowing the R&D spending to have a direct effect on boosting Amazon’s retail business.

No ads for Alexa

Amazon’s Alexa will be saying no to adverts for the foreseeable future. Amazon Pay’s VP and GM, Patrick Gauthier, says: “I don’t know many consumers who find ads popping up in life to be convenient and friction-free. We care deeply about the customer experience being natural and personal. Your personal assistant in the room sitting next to you would not be a walking billboard for advertisers, and Alexa shouldn’t be either.”

There are instances in which Alexa could provide shopping suggestions, but he said these suggestions must be solicited by the user or they will quickly begin to feel invasive.

However, done right, he says there are ways that brands could tactfully place offers in front of customers if and when the time is right – and if and when the customer wants them.

Taking the FIS Voice Challenge skill, since Alexa was a part of that couple’s process of finding and purchasing a new home, Alexa is also smart enough to conclude that the customer will then need furnishings and other goods to put in that home. By putting consumer experience at the forefront of Alexa’s development, Amazon is engendering customer loyalty, tightening their hold on the smart-speaker market further.

This content was originally published in RetailTechNews.

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