When Platforms Attack
Amazon began life as an online bookseller, of course, but now there are few products you can't buy on the site. New research led by HBS's Feng Zhu investigates a common worry of Amazon's third-party sellers: What happens when, instead of just matching buyers and sellers, the platform decides to offer competing products itself? Zhu's team examined 164,000 products sold exclusively by third parties and found that 10 months later, Amazon had begun directly selling items in 3% of those product categories. Further, the items sold directly by Amazon often became the default option in search results. The team recommends that sellers using the Amazon platform take some defensive steps: They can reduce the odds of Amazon's entering the market by signing exclusive deals with suppliers (or manufacturing some products themselves) and focusing on a large selection of niche products rather than widely popular items. This reprint contains three additional Idea Watch articles. "Do CMOs Really Add Value?" looks at extensive new research aimed at providing a once-and-for-all answer to this persistent question (the conclusion, in brief: Yes). "The Wrong Way to Reduce Churn" describes a study of a wireless communication firm whose seemingly customer-friendly outreach effort--offering overspending consumers a better plan--backfired and cost it customers, and offers some theories as to why. And "Quitting Time" is a visual depiction of when employees in a million-person sample left their companies--showing that in today's candidate-driven job market, people move on surprisingly soon.