With new techology entering the market, Mark Polson looks at ways to interact with your portfolios
Our subject this month is friction and the importance of a lack of it. If that sounds obtuse – well, just wait until you have read the rest. Just my little joke; all will become clear.
After the excitement of Apple’s iPhone 7 launch (said with a straight face), rather less fuss was made of Amazon’s Echo speaker, which hit the UK on 15 September. This funny looking black or white cylinder sits on your worktop or wherever and does … what, exactly? It does not charge up and move around with you; it is designed to stay where it is. It does not have a GPS or an accelerometer, or a gyroscope; it is designed to stay where it is. It does not even have a screen.
It just sits there, taking up space, which makes its £150 (£100 if you are a Prime member) price tag hard to swallow.
Ah, but what the Echo is doing is listening. Specifically, it is listening for you to say “Alexa”, which is the Amazon AI assistant – its equivalent of Siri, or Cortana or Google Voice.
Say “Alexa” and the Echo can act on more than 3,000 commands, including playing music from Amazon Music or Spotify, controlling any smarthome/Internet of Things devices and, of course, ordering stuff you do not need from Amazon.
What earthly use is that? Who wants a cylinder lurking malevolently on their worktop – eavesdropping on their conversations and possibly waiting for the signal to spark into life and destroy us all? Have these people not seen 2001? Or I, Robot?
The answer, of course, is Jeff Bezos: the main man at Amazon. Amazon is built on simplicity. It is easier to buy stuff on Amazon than anywhere else.
People will, when faced with a choice of vendors on the site itself, pick the one that says “fulfilled by Amazon” even if it is not the cheapest. They will even pay a chunk of money each year to be Prime members and get even quicker delivery and various other benefits.
The reason, Bezos posits, is that every time you hit a break in a process, the friction it causes gives you a headache. Specifically, it raises the emotional price you pay for whatever it is you are doing.
That price is arguably much more important to us as individuals than the actual monetary price of something. It is the reason we hate Ryanair, but tolerate BA.
It is also the reason that Ryanair and Easyjet went back to giving seat reservations. It is why John Lewis and Marks & Spencer can charge what they charge and stay afloat.
Echo that emotion
What the Echo does – or will do – is make certain basic things easier. It removes or reduces friction. As an example, it will shortly integrate with the Sonos range of wireless speakers. Why? Because saying, ‘Alexa, play Vanitas by Anaal Nathrakh in the kitchen’, is easier and less frictional than getting your phone out, opening the Sonos app, navigating to Spotify, typing in Anaal, selecting the album you want from their many fine offerings, selecting the room you want it to play in, and then settling down with a coffee to enjoy some fine Midlands death metal.