Walking in a Widget Wonderland

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This week, Amazon.com dove into the widget economy, following others, including Google, that are experimenting with this latest trend. Though I've examined widgets and the effect they could have on e-commerce before, it's time to take another look at e-commerce-centric widgets and see how they fit into your strategy.

Through its affiliate program, Amazon Associates, the retailer is offering these widgets to drive consumers to the site and, ultimately, increase sales. Spend some time playing with Amazon's widgets. With an impressive array of widgets, associates can populate their Web sites, social networks, and blogs with product merchandise.

Some of the offerings:

In addition to these widgets, all of which feature customizable products and display skins, Amazon is offering an invisible widget called Quick Linker. This widget doesn't have a display of its own. Instead, it enables bloggers to easily link text to Amazon products by automatically putting the user's affiliate link in the blog.

Leading by Watching

Because Amazon has an open API (define) called Amazon Web Services, the functionality that enables these widgets to operate has mainly been around for a few years. In fact, Amazon widgets have existed for a while, built by external developers. That Amazon created its own widgets (some would say a little late) shows two things. First, it validates widgets in e-commerce, as Amazon is a major player. Second, it shows the online retailer has had its ear to the ground for quite some time. By understanding how its own users want to use widgets in relation to its content, Amazon was able to see the effect of widgets without ever building them internally. Now the business case has proven itself through user-created widgets, and Amazon is taking the opportunity to put widgets' power in more users' hands. The minute a large company reveals metrics and statistics around widgets' value for e-commerce, this industry will explode.

Interestingly, Amazon's widgets are product-centric. The wealth of user-generated content isn't really represented in its widget offerings. Was this a conscious decision? One could easily imagine widgets that contain all the reviews contributed by a certain user, Listmania widgets, and the like. Time will tell if Amazon deems these content-focused widgets worthy of existence.

Next Steps for Amazon and Industry

Missing from Amazon's widgets is actual e-commerce functionality. Widgets serve to promote products, whether they're from Amazon or other major players, such as iTunes. ITunes widgets display favorite albums and recently purchased products from iTunes. The products link back to the originating company's e-commerce hub. But the user can't purchase products directly via the widget.

Business reasons aside, there are security reasons preventing companies from pursuing an e-commerce functionality. Currently, there's no secure method for passing information between a back-end system and a widget. Will there be in the future? Of course. It's is an obvious step, and necessary for widgets' evolution.

Companies that have been leading the widget revolution have designed a workaround to this problem. Snocap requires users to go to its site to sign up and submit payment information. Once they're registered, users can make purchases through the widget. With Amazon's large user base, the retailer could include a similar functionality in its widgets. But knowing every hacker in the world is waiting to take advantage of any security hole introduced by such a system, it's wisely taking a cautious approach to including such functionality.

True decentralized e-commerce, however, will only exist when this checkout functionality exists within the widgets themselves. Until then, we have in effect a revitalization of affiliate marketing.

Still More to Explore About Widgets

Originally, I was going to wrap up this column with a paragraph on widget usage in the business-to-business (B2B) world. I quickly realized this topic was large enough to deserve its own column. Let me know if you're interested in learning more about this topic. If there's sufficient response, I'll dig into it.

That also leaves another entire topic to explore: the social implication of throwing e-commerce into social networking sites. But I'll leave that issue alone for now.

Until next time...

Jack