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Posted by Rob Brosnan on September 29, 2011
The new Amazon Silk promises to speed tablet web browsing. It also provides Amazon's core business with a secret weapon against other retailers. Amazon Silk is essentially a browser that, by default, routes all traffic through a proxy server. Amazon's back end consolidates multiple calls for images, libraries, and cookies into a single request. The proxy can even pre-fetch future page requests by users (think of search results pages).
How does Amazon Silk provide a competitive advantage to Amazon? Each Kindle Fire device is registered with an individual who is known to and maintains an extensive purchase history with Amazon. Amazon Silk allows Amazon to collect the users' browse behavior beyond Amazon-owned web properties. Regardless of where customers make purchases and whether those products are digital or material, Amazon can use the data collected to its advantage.
Amazon's new layer of Customer Intelligence permits it to:
- Improve customer recognition. Amazon can maintain customer identity without facing the problems of cookie deletion or Flash LSOs. Should users access Twitter or Facebook through the browser, Amazon will have access to social identity as well.
- Amass a comprehensive customer profile. Through Amazon Silk, Amazon can correlate off-site clickstream, purchase and search data with its existing customer profiles. It can use these insights to optimize merchandizing and pricing. By decoding other retailers' cross-channel programs – say e-mail to Web – it gains the ability to benchmark its efforts against competitors at the individual customer level.
- Gain a broader understanding of purchase behavior. As consumers spend more time researching products before purchase, Amazon can gain a much deeper understanding of the life cycle stages in a customer's journey towards purchase. Amazon can use this data to predict when customers will transition between stages, such as from active consideration to purchase.
- Extend web and cross-channel optimization. Armed with profiles and predictive analysis, Amazon can optimize cross channel marketing, particularly in the ad-supported devices, email and social, to drive demand, particularly on considered purchase item.
How far could Amazon push the Amazon Silk's advantages? It could:
- Use data to further subsidize device pricing. Expanded Customer Intelligence could join digital media – books, movies, TV shows – to subsidize the Kindle Fire's price.
- Deploy Amazon Silk to the desktop. While speed isn't as critical an issue on desktop and laptops, Amazon could develop a browser or plug-in to extend customer visibility to desktop browsing.
- Manage privacy on user's behalf. Amazon could offer to anonymize routine browsing behavior for Amazon Silk users. It could even offer a personal data locker through which users are paid by third parties for access to personal and transactional data.
- Launch companion products. Amazon could offer businesses a tagless web analytics solution. Beyond matching Google Analytics's price point, Amazon could offer competitive intelligence as a premium add-on, since it knows users' activity before and after site visits.
Few others can or will match Amazon's ecosystem. Apple could deploy a similar browsing proxy with relative ease, but it doesn't have the same internal motivations of Amazon's broad retail business. Android's fractured deployment complicates Google making a similar move. What about Wal-Mart or even Visa?
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