Amazon Explore launched recently, tries to capture consumer demand for experiencing virtual tours and activities in destinations, such as how to cook a dish, personalized guided tours of cities and attractions.

Some local experiences executives believe that this is Amazon's initial step toward entering in full force the highly lucrative and digitally-underserved "Tours & Activities/ Local Experiences" travel sector and that it would be an "easy implementation" for Amazon to become an online retailer/online travel agency in the local experiences sector and can do this "just by opening a category" on their site.

Other industry experts believe that these virtual tours are more like curated reality cooking and travel shows, more like Amazon Prime TV series, and not yet another attempt by Amazon to enter the travel business as an OTA and that the online retail giant does not have the expertise and technology to enter the travel space as a major player.

The question is, is Amazon Explore yet another attempt by Amazon to enter the travel space as a major player and online travel agency/retailer?

Peter O’Connor
Peter O’Connor
Professor of Strategy at University of South Australia Business School

Although largely free from competitors, given its highly fragmented, and in some cases semi-professional nature, the activities/tours/experience sector would be hard, not easy, for Amazon to exploit.

While undoubtedly it could channel some of its vast traffic to such a new product category, and such experiences would be highly complementary to its existing portfolio of lifestyle products, the challenge would be to cost-effectively consolidate supply from the multitude of small, primarily independent, operators that provide the richness sought by customers. Even if it went down the expensive and time-consuming process OpenTable-like route of providing suppliers with equipment and systems to digitize the management of their offer, it would still struggle to attract sufficient quantity and variety of supply to provide a compelling offer for its demanding customer base. And all this trouble for a small percentage commission of a relatively small transaction fee?

Thus my feeling is that this play is more media orientated, where similarly there are strong complements with Prime Video; digital content is easier and cheaper to source, and monetize is easier through advertising and subscription models.  

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