The online behemoth, now a trillion-dollar business, succeeds in being a consumer’s dream and a deeply unpopular business at the same time. But what can we learn from what Amazon does?
There’s been a fair bit of negative press about online colossus Amazon – from the uproar about its tax affairs and treatment of workers, to the effect it’s had on the high street.
So why is Amazon so popular with its 310 million plus (www.statista.com) account holders? And what can traditional retailers learn from it?
Let’s take a look.
Good CRM is pivotal for any brand, online or not. And Amazon’s market-leading CRM strategy has been crucial to its success.
Amazon has harnessed its data to deliver a highly personalised experience: a simple interface, accurate customer recommendations and one-click ordering. Through features like these, Amazon has successfully managed millions of relationships, without meeting anyone. And its in-house CRM software means it’s all accomplished with minimal human intervention.
Traditional retailers can follow suit by ensuring they use customer data to send recommendations, whether via email or in store.
Great online UX can be replicated through an intuitive store design, to create a seamless buying experience.
Much has changed since the birth of the loyalty scheme in the 1980s. “Buy ten, get the eleventh free!” no longer cuts the mustard.
And Amazon knew this first. In 2005, they launched Prime. A subscription-cum-loyalty scheme, it offers members unlimited free next-day shipping, exclusive discounts and first access to product launches.
But there’s more: the real value is the perceived free (£7.99 a month) content – from Kindle books, to music, TV and film. While providing a range of treats, Prime’s content keeps customers returning to their site.
So what can we learn from Amazon Prime? Although most brands will never have Amazon’s budget, prioritise genuine value over token gestures. Loyalty will surely follow.
One of Amazon’s strengths is its ability to spot an opportunity and successfully exploit it. For example, its purchase of Whole Foods last year took many by surprise. But it cemented Amazon’s position in the grocery sector, along with its Amazon Fresh and Amazon Pantry services. Within 24 hours, the move had wiped out some $22 billion in market cap among Whole Food’s competitors.
Amazon Business is another example of its disruptive mindset, which offers purchasing solutions and exclusive benefits for registered businesses. Amazon proves that it doesn’t pay to ‘stay in your line’ and do what is expected of a business within your category. Being bolder and unique can really give your business the edge.
Amazon is obsessive with emerging tech. Whether we’re talking delivery drones or voice technology, you can bet they’re at the forefront and using it to their advantage.
For example, the futuristic Amazon Prime Air delivery service. 86% of abandoned online carts are the result of expensive shipping costs. The answer: commercial drones. They’ll travel at up to 100mph, carry 5lbs, get packages to customers in 30 minutes and could potentially reduce costs to $1 per shipment, according to ARK Investing Group. (uk.businessinsider.com).
Will we ever see them? Who knows – but talking about drone delivery is great, customer-centric PR.
Again, budget aside, Amazon teaches us that keeping your finger on the tech pulse is essential. But it’s never about tech for tech’s sake. We should always look at which innovations are suited to our business goals.
It’s clear that Amazon knows exactly what they’re doing when it comes to CRM, staying current, being disruptive and putting customers at the heart of strategy.
Regardless of your business’ size or nature, Amazon’s own principles can apply to you.
Use your data to understand your customers
Put loyalty first, and be genuinely helpful
Challenge the status quo for your industry
Take intelligent risks
Invest in finding emerging tech that can further your business