Jerry Clode
May 16, 2019

Why Jeff Bezos is wrong about market research

A market researcher feels the Amazon founder’s comment that “market research doesn’t help” needs a response.

Why Jeff Bezos is wrong about market research

Jeff Bezos’ annual letter to shareholders at Amazon, like the celebrity CEO himself, has become an increasingly important media event. 

Usually I am aboard. It's a nice opportunity to see how one of the world’s most successful businesspeople views the future of his company.

Unfortunately, this year, the read was less palatable. About halfway through the letter, Bezos states “market research doesn’t help”, suggesting:

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."

Damn son. Having committed over two decades to discovering insight, I want to defend market research, and suggest why it is more important than ever for brands.

But Jeff, you did do research.

I can understand the euphoria created by Echo’s success within Amazon, the biggest hit in its hardware history. Certainly, a boost after the company’s high-profile failure with the Fire smartphone.

First pitched internally in 2011, it took five years before Amazon launched Echo in 2016.

Now I am not disagreeing with Bezos on the point that consumers could not have articulated an intelligent, voice-controlled household appliance in the form of Echo.

However, the idea must have been born from consumer need. 

If not, it was simply an abstract concept with no commercial imperative. I am guessing if this hunch about voice activation was explored through explicit market research, Amazon’s pathway to millions of households would not have taken half a decade.

More important to note is that Echo’s breakthrough was based on a key category insight. To ensure clear differentiation from key rivals Apple and Google, it was essential that Echo was not positioned as 'just another music player'.

The Amazon team clearly identified a new category and behavioral white space, then delivered an accessible technological solution. 

The idea that market research did not play a part relies on the assumption that the industry focuses solely on consumer insight. 

A key part of a modern market researcher’s arsenal is category analysis, informed by semiotic and cultural approaches—a skill set that would once again have “helped” Jeff get to his Echo moment faster.

No one can predict the future, not even market researchers.

Implicit in Bezos’ comment is the idea that market research should have predicted the idea of a product like Echo. 

Put simply, aside from Hollywood mediums, no one can predict the future.

However good market researchers can most certainly “help” identify and frame up future opportunities for your brand.

We can frame the future by logically interpreting what we can observe in the present. This involves identifying gaps that exist in the lives of consumers, and the wider factors that impact their realities.  Factors include interpreting technological change, societal attitudes, and meta-factors such as environment and government policy.

Increasingly, there is a tendency in our industry to place faith in data-led forecasting to guide innovation. However, this approach falls down on two fronts. 

Firstly, this logic means your innovation will not be unique, as at the end of the day, all your competitors have the same data. 

Secondly, data dependence avoids approaching the challenge from a human perspective—an intangible factor that ultimately sparks true product breakthroughs.

You might get to your next innovation from years of internal debate (bickering or kowtowing), but by embracing that great ideas come from solving consumer tensions, you will get there quicker with a switched-on market researcher at your side.

When I have a beer with Jeff next time, I will be sure to mention that there would have been an Echo in the room much faster if he believed in market research.

 

Jerry Clode is the founder of The Solution, an independent market research agency focused on China and emerging markets.

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