Starting as a small online bookstore, Amazon has grown significantly. Today, it is an e-commerce giant. In fact, it is one of the first places shoppers think of and go to when they want to purchase anything they can imagine.
With the onset of the COVID-19 pandemic, consumers’ retail habits have also been changing in 2020. Amazon has adapted to the times, evident in its financial performance which reflected a 40% growth in net revenue. Many believe that these newly entrenched habits are here to stay. A recent survey found that close to 60% of consumers agreed that even after the pandemic, they will still shop online more than prior to the pandemic.
In 2021, Amazon is expected to dominate more than half of the whole e-commerce market. Its growth trajectory will not stop so soon. What are some learning points we can all gain from Amazon’s huge success in e-commerce?
1. Always cater to consumer demands
Amazon’s success largely stems from its capacity to harness the power of recommendations.
CEO Jeff Bezos explains it aptly: ““It used to be that if you made a customer happy, they would tell five friends. Now, with the megaphone of the internet, whether online customer reviews or social media, they can tell 5,000 friends.”
News spreads like ripples on social media. Through being customer-centric and giving each customer a great experience, when customers share their experience with friends and family, Amazon will increase its customer base. Newcomers then browse Amazon’s products page, gain a positive experience themselves, and share this experience to even more people. An entire network is created in this way.
2. Make yourself the default option for customers
Amazon has everything. Unbelievably value products. A highly effective recommendation system. Easy to access “buy now” buttons. Complimentary delivery for Prime products. Amazon removes many of the small annoyances when it comes to online shopping.
Amazon is integrated. Compare this with alternative digital shopping experiences. Suppose you are looking for a new pair of badminton shoes. Should you have a specific brand in mind, you have to visit its website, look for your desired shoe and compare prices. You may even need to compare different websites. When you have made up your mind, you may need to create a one-time account which is a whole different hassle. You may not even be sure when your product will arrive, as compared to Amazon where you have a date before even purchasing your product.
Because of this, Amazon is the “go-to” retail channel for many customers. Brands not on Amazon will lose out to brands that are. This encourages them to join Amazon, resulting in a consolidated marketplace with hundreds of options for consumers.
3. Master the art of data analysis
Amazon focuses a lot on R&D and trying out new things. They experiment on each and every part of their business, from pricing to range of products, so decisions are based fully on customer needs.
Amazon looks at market data to determine what is most relevant. Recently, there is growing demand for smart home systems. As a result, Amazon continuously improves its Echo to add more innovative features. Alexa on Amazon Echo was a premier in the area of voice-controlled technology. It is user-friendly and compatible with many different kinds of devices used by users.
4. Being competent in logistics
A key feature of an e-commerce company lies in its ability to deliver its products quickly. Amazon has mastered the ability to deliver its products in no longer than two days. Amazon has also done well in making use of AI and technology to guess what a buyer may want to purchase, which has helped Amazon deliver goods to consumers at an amazing speed.