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Amazon's Next Big Challenge: Getting You to Buy Stuff You Didn't Know You Wanted

"Amazon is by far the most efficient demand fulfillment channel out there, which is great. But if nobody has ever heard of your product, they’re not likely to discover it on Amazon."

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Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

Amazon wants to be a startup’s best friend. But it may have to make big changes to fulfill that promise.

Late last month, Amazon unveiled a new online storefront dubbed Amazon Launchpad, where new products from startups and Kickstarter and Indiegogo campaigns are for sale. Shoppers will find new twists on familiar items such as home Wi-Fi systems and suitcases that lock themselves and include built-in scales and phone chargers. But there are also new genres of goods altogether, like computer screens designed exclusively to display digital artwork and a line of body care products made out of seaweed.

Amazon’s pitch to these startups, which sell their goods to Amazon at wholesale prices, is that the e-commerce giant can get their products discovered by way more people than through other sales channels. But some of these categories of goods may pose problems for Amazon because they fall out of Amazon’s sweet spot. Amazon is an amazing place to shop when you know the exact brand, or at least type of product, you want to buy. It is, at its core, a search engine — one that’s fast, precise and increasingly a big competitive risk to Google’s own product search business.

But it is still a long way off from being a top source of inspiration for shoppers to discover completely new goods they had no intention of buying.

“What most people don’t understand about Amazon is that it is a demand fulfillment channel, meaning that the vast majority of what is bought on Amazon is premeditated,” said a former Amazon executive who is still a close observer of the company. “People already know that they want it and they go to Amazon to buy it. Amazon is by far the most efficient demand fulfillment channel out there, which is great. But if nobody has ever heard of your product, they’re not likely to discover it on Amazon.”

That’s still one of the main advantages of brick-and-mortar: The serendipity of walking down an aisle on your way to try on a pair of jeans, but first coming across a pair of shoes you can’t afford but still end up buying. Making discovery easy is also something that certain online platforms have done better than Amazon, too. Pinterest, for example, has done a great job of making itself a go-to platform for browsing products when you have some down time. But the company is still in the early days of trying to prove that people will buy items directly on Pinterest, too.

Amazon, with its hundreds of millions of shoppers, would be extremely dangerous if it could somehow become a force in product discovery in addition to demand fulfillment. It is trying. In the case of the Launchpad initiative, Amazon is providing the participating merchants with some marketing perks, including inclusion in targeted email campaigns, some premiere merchandise placements and access to the Amazon Vine review program.

Elsewhere on Amazon, the company is moving out of its comfort zone in other ways. It has created a new Pinterest-like layout exclusively for sponsored product listings and has been advertising it on the top of the homepage over the last few months. This comes two years after Amazon tested a similar layout before abandoning it.

Amazon is also in the process of developing an Etsy-like marketplace called Handmade at Amazon. All of these initiatives will require Amazon to get great at product discovery to succeed.

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