Inc.'s 3 Biggest Product Failures

By Daniel B.

On its road to becoming one of the most successful companies in the world, Amazon (NASDAQ: AMZN) has made its fair share of mistakes.

Unlike many businesses, however, the online retailer has been willing to quietly admit its errors and move on from its failures. This has allowed the company to experiment with new ideas while not throwing good money after bad.

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Here are three of the e-commerce leader's biggest flops in recent memory.

Say goodbye to Amazon RegisterAbout 16 months ago, Amazon introduced Register, a credit card processing service for retailers. The company was very aggressive rolling out Register, offering favorable fees compared to those being charged by the existing players in the space.

Source: Amazon

Unfortunately, despite it being ostensibly a good deal, Amazon Register never caught on with retailers, likely because store owners were wary about sharing their transaction info with a competitor.

"Existing customers can continue to use Amazon Register until February 1, 2016. After that date, we will discontinue Amazon Register," thecompany wrote in a message to customers on its website. "We regret any inconvenience that this may cause."

This was a fairly quiet ending for a product that was launched to great fanfare in August 2014. There was no press release or major announcement, just communication with existing customers and aFAQ telling them how to handle the end of the service.

Daily deals are no moreFor a while, the success ofGroupon led everyone from local newspapers to Google to launch a product offering daily deals. Amazon was no exception as it unveiled Amazon Local to capitalize on the trend. This offering had a bit of a "me, too" feel, and it was in no way differentiated from its rivals. Local even offered some of the same deals that could be found on competing sites.

Source: Author

That proved to be a short-lived venture as well. Amazon spoke to GeekWireabout the suspension of its Local app, "We've learned a great deal from the daily deals business and will look for ways to apply these lessons in the future as we continue to innovate on behalf of our customers and merchants," a company spokesperson told the tech news site. Existing purchases will be honored, butstarting Dec. 18, "you will no longer be able to reinstall or download the Amazon Local app if you switch devices or uninstall the app."

Consumers embraced daily deals when they were first introduced, but the novelty wore off quickly. By the time the online retail leader entered the space, the fad was already losing steam, and even Amazon's huge customer base was not enough to make it succeed.

If you want to criticize anything about Local, it would be that Amazon did nothing to make its service unique, whether through technological innovation or simply bringing in more compelling deals. In reality, though, this is just the case of a product which really seemed like a good idea when it launched but fell victim to rapily changing consumer tastes.

The Fire Phone flopsAmazon's relatively successful foray into tablets and streaming media players led the company to try its hand at creating a smartphone. The product was launched with a lot of hype, but consumers weren'tparticularlyintrigued by its ability to render 3D-like product images of things that could be bought from the online retailer. And, unlike Kindle tablets and Fire TV, Fire Phone was not sold at a below-average prices. Instead, it was sold through a single wireless provider at a then-standard for top-tier handsets price of $200 with a two-year contract.

The Fire Phone's failure was predicted from the point its existence was confirmed by Amazon. "If they had shown up with this phone a long time ago, they could have gotten a lot more attention," Frank Gillett, a Forrester analyst, toldFortune. "But it's a very noisy crowd in an established market. Once you show up at the party now, nobody pays attention."

Currently Amazon has stopped selling Fire Phone, but it has not completely shut the door on offering another version of it down the line. If it does, you can bet the company will price it more competitively and find more ways to differentiate it from its rivals.

Innovation through experimentationThis willingness to try new things has opened the door to great innovations. Some of its flops will almost certainly provide learning opportunities that lead to greater success down the road. That's a philosophy which has been used to great success at Google X, which was formerly the "moonshots" division of Google. That area is responsible for everything from driverless cars to Google Glass and artificial brains. Not every Google X project becomes a commercial success or even makes it to market, but the learning process is invaluable.

Amazon is not quite as adventurous, but you can assume that its employees are learning from their own experiments.

The article Inc.'s 3 Biggest Product Failures originally appeared on

Daniel Kline has no position in any stocks mentioned. He owns multiple Kindles and Fire TVs. The Motley Fool owns shares of and recommends Alphabet (A and C shares), and Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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