Written by Nick Heer.

Amazon Is Gutting Alexa

Eugene Kim, Insider:

Insider spoke with over a dozen current and former employees on the company’s hardware team to get a better picture of its current condition. They described a division in crisis. While Alexa was once one of the company’s most rapidly growing projects, the mounting losses and massive job cuts underscore the swift downfall of the voice-assistant and Amazon’s larger hardware division.

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Meanwhile, the first cracks in the products business model began to show. Internally, the team worried about the quality of user engagements. By then Alexa was getting a billion interactions per week, but most of those conversations were trivial, commands to play music or ask about the weather. That meant less opportunities to monetize. Amazon can’t make money from Alexa telling you the weather — and playing music through the Echo only gives Amazon a small piece of the proceeds.

I cannot put it much better than Todd in the Shadows did:

Amazon sold the Alexa as a loss leader that didn’t actually lead to anything.

We are often told technology companies are reinventing the way many of us will purchase products, but I do not buy that narrative. Before voice assistants — which would apparently result in us shopping by verbal commands — Amazon released Dash buttons. Various direct-to-consumer brands originally operated as online-only retailers, only to realize many people do not want to buy a mattress or eyeglasses without trying them in person. The COVID-19 pandemic brought with it another wave of how different the world will operate on a fundamental level.

It seems none of these predictions has fully panned out. There are many people who will continue ordering groceries with curb-side pickup, buy everything online with the understanding anything unwanted can simply be sent back, and maybe some people will yell at their speaker to send them a new box of Dutch Blitz after a particularly aggressive board game night. Most people probably will not. We will mostly continue to click “Add to Cart” and shop in stores near where we live. We should make cities more accessible and less car-centric because that helps our communities far more than pressing a button near your laundry machine to have more detergent shipped to you.

I am curious about how in-app shopping will fare in places like TikTok and Instagram. In five years, will people be buying clothes and home furnishings from the people they follow? There is no way to know, but it seems like a story we have all heard before.