Amazon’s Fire Phone: Will It Burn Online Retailers or Fizzle Out?
There is a classic philosophical thought experiment that asks: “If a tree falls in the forest and no one is around to hear it, does it make a sound?” In the world of smartphones, an equivalent question might be: “If a smartphone focused on mobile shopping launches and most online retailers are unprepared for it, does it make a difference?” While the former question may never be satisfactorily answered, smartphone industry watchers may soon have the answer to the latter question, as Amazon’s (NASDAQ:AMZN) Fire phone launches on Friday, July 25.
Not surprisingly, Amazon’s entry into the highly competitive and crowded smartphone market is heavily focused on driving more customers to buy digital content and other products online. However, with several of the phone’s key features specifically designed to steer online shoppers to Amazon and with many rival mobile e-commerce sites unprepared to handle visits from a smartphone that uses the Android-based Fire operating system, it appears that Amazon will be the main beneficiary of the Fire phone’s unique capabilities.
As recently noted by Yottaa, a cloud software company that specializes in web and mobile performance optimization, only 22 percent of top mobile retail sites are ready to handle traffic from Amazon’s Fire phone. Based on a sample of 150 top mobile retail websites, researchers at Yottaa discovered that 78 percent of sites will present Fire phone users with the dreaded unoptimized “desktop” version of the site, rather than the mobile version.
Yottaa tested the various websites by using a “user agent string” used by Fire-based mobile devices in lieu of an actual Fire phone. However, Yottaa vice president of products Ari Weil noted that this is a proven method for testing a website’s ability to detect mobile devices. “With the exception of native apps (ie what users install on their mobile devices via app stores) user agent strings are the metadata that website frameworks, front end technologies, and other device detection products and services use to make decisions about what to deliver to and display in a device,” Weil told The Cheat Sheet. He also pointed out that, “Unintended consequences resulting from the misinterpretation of user agent strings are common” in the world of e-commerce.
The debut of an Amazon-centric smartphone that won’t render many competitors’ sites correctly will likely be an additional blow to other mobile retailers that are already struggling to compete against Amazon on prices. According to Weil, there is still a significant gap between the time spent browsing on mobile devices when compared to the number of purchases actually made via mobile devices. However, this doesn’t mean that e-commerce sites that aren’t optimized for a mobile platform won’t be impacted.
“For Yottaa customers, the initially observed delta between desktop and mobile conversion and goal completions is significant and the primary pain the customer asks us to address,” stated Weil. “Once we accelerate performance and context (location, device, and network connectivity) the gains are immediately reflected in key metrics including page views, time on site, conversions, and ultimately revenue.”
Obviously, a phone made and sold by Amazon is going to be heavily slanted toward directing mobile shoppers to its own website. Besides offering early adopters twelve months of Amazon Prime membership for free, the Fire phone also comes loaded with two unique features that Amazon is hoping will entice more customers into its ecosystem of services and products. One feature — Dynamic Perspective — adds a 3D-like perspective to Fire phone apps by detecting a user’s head movements via four front-facing cameras. This feature could be especially beneficial for the sales of games in Amazon’s Appstore. The other unique feature — Firefly — is a program that allows Fire phone users to quickly capture and identify millions of items, including books, CDs, and DVDs that can then be easily purchased via Amazon’s online retail store. Firefly can also be used to capture web addresses, phone numbers, and other data that can be added to a user’s contact list without having to type in the information.
In this sense, the deck is already stacked against other online retailers when it comes to Fire phone owners. However, the inability of some e-commerce sites to properly detect a Fire phone will only make it that much harder for those retailers to reach mobile shoppers. “[A]ny and every retailer not serving adaptive content that is optimized for the users browsing context (again, location, device, and network connectivity) is risking not only conversions and revenue, but longer term brand damage and customer loyalty,” Weil told The Cheat Sheet. So, to answer the question posed in the beginning of this story — yes, when it comes to e-commerce websites that are unprepared for the Fire phone, it could make a short-term and a long-term difference to an online retailer’s bottom line.
So what are the some of the major e-commerce sites that may get burned by the inability to properly detect Amazon’s Fire phone as a mobile device? According to Weil, some of the top mobile retail sites that are unprepared for the Fire smartphone are Costco (NASDAQ:COST), Eddie Bauer, Sears (NASDAQ:SHLD), and Walgreens (NYSE:WAG). Fire phone-friendly online retailers include Dick’s Sporting Goods (NYSE:DKS), Gymboree, PetSmart (NASDAQ:PETM), and Radio Shack (NYSE:RSH).
On the other hand, any positive or negative impact due to a retailer’s ability or lack of ability to render its website correctly on an Amazon Fire phone will also likely be closely linked to the device’s overall popularity. With the device just making its debut on Friday, July 25, it will be a while before industry watchers know how much the Fire phone impacted e-commerce websites that were unprepared for it. Today, Amazon investors are likely more concerned with the company’s recent earnings report that showed it sustained yet another loss this past quarter. Amazon shares have dropped by over 10 percent by midday Friday following the company’s earnings report.
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