Amazon Echo sold out online, only available at stores — and rivals

Dive Brief:

Amazon's voice-activated Echo and Echo Dot devices are out of stock till after Christmas Day and the first day of Hanukkah, according to the e-commerce giant’s website.
Because of a “quirk” in Amazon’s supply chain, which The Wall Street Journal reported but didn’t detail, the Alexa-powered speakers are still for sale at many of its physical stores and pop-ups. Time also found some Echo units for sale at rival retailers Best Buy, eBay and Rakuten, both in stores and online.
The black Echo is scheduled to resume shipping on Jan. 17 while the Dot mails out Dec. 27, according to Amazon. “Due to demand, we encourage customers to purchase an Echo if they see it available,” an Amazon spokesperson told the Journal.

Dive Insight:

Running out of one of the season’s top-selling gadgets is a nightmare scenario, especially if there’s a rival product to take its place. Amazon’s supply snafu leaves an opening for Google’s new personal assistant, which several reviews have judged “smarter” than Amazon’s Alexa artificial intelligence platform (though outpaced by Alexa at the moment thanks to the input of third-party developers).

It’s hard to know if the glitch in Amazon’s supply chain is a matter of runaway demand outpacing supply, or some other more complex (or preventable) issue. It's also not clear whether Amazon has any omnichannel capabilities that would allow its physical locations to fulfill orders, a system that rivals Best Buy and Target have mastered.

Certainly, Alexa has taken off in a relatively short period of time, which may have complicated Amazon's planning. Amazon has been savvy about promoting Echo, selling 5.1 million devices in the U.S. according to Consumer Intelligence Research Partners, and rising awareness of the device (and its cousins, Dot and Tap) promises to accelerate demand.

But the e-commerce giant may also be benefiting from wider enthusiasm around tech devices in general. The Consumer Technology Association survey found a 10 percentage point jump in the number of American adults planning to buy tech products from the Monday before Thanksgiving through Cyber Monday. As a result, Echo devices have been poised to capture much of the tech enthusiasm, with awareness of those devices rising to 69% as of October, up from 20% in March 2015, according to CIRP’s report.

Amazon has also expanded the capabilities of Echo, Alexa and related devices, which now allows customers to buy items from Amazon’s website, find a lost phone, turn on household appliances, help a cook with a recipe and text people via AT&T. This season, Amazon also began offering special discounts to Echo owners who ask “Alexa, what are your deals?”

“There’s a big impetus to get an Echo in the hands of people, considering that, if you look at the Amazon Echo buyer metrics, we know that the Amazon Echo buyer makes purchases more frequently, and their spend per buyer is twice as much as the average Amazon buyer once they have one,” Andy Mantis, EVP of NPD Group’s Checkout Tracking, told Retail Dive.

Furthermore, owners of the Amazon Echo spent around 10% more on Amazon in the six months after they bought the voice-controlled speaker than before they had it, with purchase frequency also growing 6%, NPD Group's Checkout Tracking found. In addition, Echo owners conduct about half of their total online spending at Amazon after they buy an Echo.

This story is part of our ongoing coverage of the 2016 holiday shopping season. You can browse our holiday page for more stories.