By John Lustyan | @johnlustyan | 3 min read
This week in a US-only public beta, Amazon rolled out a new, live streamed way to virtually tour, learn and of course shop the world from the COVID-induced confines of your home.
What is it? In their own words, Amazon Explore is a “new tech platform and marketplace that offers access to live virtual experiences with tour guides, store owners and other local experts in countries around the world.” From virtual shopping in Ridgeland, Mississippi to bagel making in Montreal to touring the Kyoto’s Nanzen-ji Temple in Kyoto these live streamed virtual experiences range from 30 to 90 minutes of length and from from $10 to $200+ per session.
Two-Dimensional Problem Solver. While in development well before COVID-19 hit, the pandemic travel restrictions present a perfect opportunity to speed to market, solving for both consumer demand and supply side issues.
- Consumer demand is PENT UP. Americans eagerly looking to recoup lost summer vacation time spent in lockdown with 54% of travelers saying they are more likely to travel in the fall this year than in previous years. However, those bigger ticket adventures abroad and elsewhere will still continue to be substituted for road trips and short distance airbnb rentals.
- Meanwhile the supply side is devastatingly underutilized. With air travel down almost 90% vs 2019 and hotel occupancy rates in the 20-40% range, few sectors have been hit as hard as the travel business. Economists suggest a multi-year recovery to help regenerate the $1.1T the industry produced last year in the US alone. Amazon Explore specifically presents a solution to SMBs, offering an alluring digital lifeline to touring operators (and so many others) who’ve seen their entire business flatline overnight.
- A big UX step forward and the tip of the live-streaming commerce spear for Amazon. The live commerce UX within an Explore experience is so “not Amazon”, which is to say it is an incredibly personalized and uniquely “special”. While their marketplace continues to dominate on the pillars of value, convenience and breadth of selection; the shopping experience for the worlds largest retailer is universally identified as horribly bewildering and dilutive (great Atlantic read here for more). These live, personalized, virtual shopping experiences may be a sign of much more to come however. Look no further than China to find a $66B industry for live-streaming shopping, which btw is projected to more than 2x to roughly $177B (iResearch report) due to corona virus induced acceleration.
- Reminder #17,483 that no industry is safe from Amazon – and travel may be in the crosshairs next. While a small step, travel industry ecosystem incumbents are certainly tracking all activity from the $1.5T behemoth. From the company that now owns its own fulfillment air (70 cargo planes) and ground (100,000+ vans) fleets with virtual last mile robots and drones to boot, entry in to the travel industry with it’s “put the consumer first, invent and be patient” approach could have them stealing share from Expedia Group to even Airbnb in due time. Of note, travel booking companies can see operating margins in the 40%+ while Amazon hovers around 1.5-2%.
- How is the actual Amazon Explore experience? I’ll be virtually making Classic Cacio & Pepe this week so stay tuned for notes from my firsthand taste of the experience.