On April 11, Jeff Bezos, CEO of e-commerce giant Amazon, published his 2018 Letter to Shareholders. His letter begins with an ambiguous list of percentages that increase steadily from 1999 to 2018. Bezos goes on to explain how the percentages are the share of physical gross merchandise sales for independent third-party sellers, and how they have grown more than Amazon's first-party business because Amazon gives them to the tools to succeed.
Obviously self-promoting (he throws a little dig at eBay while he's at it) but nothing controversial.
But one thing Bezos wrote in his letter caught my attention: "Market research doesn't help."
This comment comes in the section of the letter where Bezos discusses the importance of failure and risk in business in order to create something worthwhile. He uses the example of when Amazon was developing the Fire phone and the Echo at the same time. The Fire phone ended up failing but Bezos says the company used what they learned from that failure to "accelerate our efforts building Echo and Alexa."
Bezos goes on: "No customer was asking for Echo. This was definitely us wandering. Market research doesn’t help. If you had gone to a customer in 2013 and said, 'Would you like a black, always-on cylinder in your kitchen about the size of a Pringles can that you can talk to and ask questions, that also turns on your lights and plays music?' I guarantee you they’d have looked at you strangely and said 'No, thank you.'”
"Wandering" in business, as mentioned above, is something Bezos says is guided "by hunch, gut, intuition, curiosity and powered by a deep conviction that the prize for customers is big enough that it's worth being a little messy and tangential to find our way there."
Bezos goes on to argue for what sounds a lot like market research: "It’s critical to ask customers what they want, listen carefully to their answers, and figure out a plan to provide it thoughtfully and quickly." But he goes on to say that isn't enough, that the "needle movers will be things that customers don't know to ask for."
The idea of giving customers things they don’t know to ask for is not a groundbreaking thought that market researchers are not aware of. In fact, a similar sentiment was shared by a client-side researcher during a Quirk’s Event session in Chicago. She referred to a quote often attributed to Henry Ford that reads, “If I had asked people what they wanted, they would have said faster horses.” Her retort was that marketing researchers have the tools to lead the innovation that determines what consumers really are looking for is a car.
Maybe Jeff Bezos doesn’t really know how marketing research works. Or maybe he does, he just thinks that he knows his customers well enough to not need MR. Whatever the reason, someone at Amazon sees the importance of market research. A Google search of “marketing research positions at Amazon” brings up multiple positions, from research analyst to research manager. It turns out that, maybe, market research does work.