In March this year e-commerce giant Amazon cracked the highly regarded Fortune 500 top 10, moving up from 12th to eighth position.
In the same period, it attained the lofty rank of the third most valuable brand globally, coming in behind only the top performers Apple and Google.
Meanwhile, the man behind the behemoth is now considered the wealthiest man in the world, according to Forbes Billionaires list 2018.
It’s an impressive resume for a brand that only 25 years ago didn’t even exist.
So, let’s take a deep dive into the rapidly expanding world of Amazon, and the ethos that drives its success.
Who is Amazon?
For the past few years, Amazon has been the buzzword on every marketer and retailer’s lips, but its story begins only a generation ago as an online bookstore which later diversified into video downloads and streaming.
Now considered the largest retailer in the world in both revenue and market capitalisation, it is the second largest private US-based employer, the third most valuable public company in the United States, and is the world’s largest provider of cloud infrastructure services, courtesy of its subsidiary AWS.
And it all began with what its founder famously describes as “regret minimisation”.
Into the wild
“I knew that when I was 80 I was not going to regret having tried this. I was not going to regret trying to participate in this thing called the Internet that I thought was going to be a really big deal. I knew that if I failed I wouldn’t regret that, but I knew the one thing I might regret is not ever having tried – Jeff Bezos
In 1994, the dot.com boom was readying to reach its peak. The internet was in its infancy and every man and his modem was clamouring to come aboard.
Among those seeking a seat on the “Good Ship Internet Adoption” was the Vice President of a Wall Street firm by the name of Jeff Bezos. He understood the potential of global connectivity and was keen to make his mark.
“I came across the fact that Web usage was growing at 2300 per cent per year. I’d never seen or heard of anything that grew that fast, and the idea of building an online bookstore with millions of titles — something that simply couldn’t exist in the physical world — was very exciting to me,” Bezos noted in his 2010 Princeton address.
Bezos reportedly created a list of 20 products he could sell online, which he then further narrowed to five: compact discs, computer hardware, computer software, videos, and books.
He settled on books as his first priority due to the large demand for literature globally, selected the name Amazon from the dictionary because it sounded “exotic and different” and began trading as an online bookstore from his garage in 1995.
In the first two months of business, Amazon sold to all 50 American states and over 45 countries. Within two months, Amazon’s sales were up to $20,000 a week and by October 1995, the company announced it was going public.
Over time they added electronics, furniture and jewellery and now sell pretty much anything consumer could want online.
“Our vision is to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online,” Amazon Vision statement.
From the outset, Amazon was guided by a focus on its customer. In addition to a vision statement which notes its aim to “be earth’s most customer-centric company”, its mission statement outlines four key principles: “customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking”.
This customer obsession is so ingrained, Bezos noted it in this year’s annual report, explaining:
“There are many ways to centre a business. You can be competitor focused, you can be product focused, you can be technology focused, you can be business model focused, and there are more.
“But in my view, obsessive customer focus is by far the most important. Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf.”
Proclaiming Amazon as the world’ third most valuable brand, Interbrand chief executive Charles Trevail noted this customer focus was key to the organisation’s success, allowing it to ”respond to the changing needs and expectations of customers”.
“Today we live in a world where consumers have more power than ever, curating their own personal brands in ways we’ve never seen. Brands like Amazon, Spotify and Netflix lead the way in this era by improving our lives in very personal ways.”
“It (Amazon) has reinvented almost every sector…It revamped its Fire Phone to become the Amazon Echo smart speaker, Amazon MP3 to become streaming music service Amazon Music Unlimited, and its 2010 crowdsourcing platform for screenwriters into Amazon Studios’ Emmy Award–winning original TV shows. What’s more, according to Morgan Stanley, Amazon’s fashion business has become the second largest seller of apparel in the US,” the Interbrand report further notes.
Amazon’s marketing techniques are the stuff of legend. At present the brand is everywhere in Australia courtesy of the A-Z campaign where it showcases the range of products available in quick, witty scenarios.
“G is for Goggles,” it notes on a static billboard in a train station showing a man squinting as he cuts onions. “L is for Lipstick”, “W is for Wipes” it reflects in a TV advert showing a mother and child in separate scenarios who have accidently swapped their lipstick and crayon.
The campaign then cleverly ties in the Amazon logo with an arrow that points from the A to Z in the logo to showcase how Amazon sells everything imaginable.
But their techniques extend far beyond high-cost TV and internet advertising, billboards and print.
Amazon has long backed its customer centric ethos with personalised email marketing that harnesses every touchpoint of the customer journey.
As Annex Cloud explains in doing so “every opportunity to market within a transactional email is taken advantage of”.
“There are nine different kinds of transactional and marketing emails, which take users through the onboarding process, transactional purchase emails, different kinds of upsells, and review solicitation. These messages get Amazon account holders accustomed to the site and all of its services, which leads them—generally speaking—to continue purchasing.
“Amazon pioneered highly personalised product recommendation emails based on, well, everything: purchase history, past order value, location, age, gender, and on-site browsing.”
In any customer-centric company, that customer must have a voice, and Amazon actively and consistently seeks pubic customer feedback. In this arena Amazon was and remains very much a pioneer.
Amazon was one of the first companies to put customer ratings and reviews on their site, way back in 1995.
Meanwhile, Bezos’ personal attention to customer satisfaction is renowned.
As News Corp explained earlier this year, Bezos still reads emails arriving at his Amazon address and forwards any complaints onto managers.
“I forward them to the executives in charge of that area with a question mark, and that question mark is just a shorthand for, ‘Can you look into this, why is this happening, what’s going on?’”.
“If you work for Amazon, getting a dreaded “question mark” email from the boss, Jeff Bezos, is very bad news indeed,” news.com.au notes.
“That’s because they will immediately have to drop everything to investigate the complaint and report back — even if it means staying back nights or weekends.”
The Amazon growth mindset
“There are two ways to extend a business. Take inventory of what you’re good at and extend out from your skills. Or determine what your customers need and work backward, even if it requires learning new skills” –Jeff Bezos.
The above quote from Bezos encapsulates everything the company does. It incorporates their vision to better service their customer and their aim to innovate with new skills, products and offerings.
Meanwhile this approach relies on two very important questions…
What are you good at?
From the outset Amazon proved to be very good at online selling. Its simple to use internet interface offered the perfect platform to sell books. Its customer reviews and feedback gave the site interest and interaction.
If the platform worked and the interest was there, what else would consumers like to buy?
So, the company extended out from this skill by diversifying its offering. From books to electronics to furniture, and toys, the range increased until Amazon’s offerings extended to the world’s largest online marketplace where you can find everything from second-hand goods to craft supplies, video streaming and more.
What do your customers need?
Fifteen years ago few of us would have imagined we “needed” a smart speaker or the Cloud. But a little down the track, it’s hard to imagine life without either.
And herein lies Bezos’ second approach in understanding what customers “need”.
Amazon isn’t the only entity to have built a successful business model on this intuition. Steve jobs of Apple once famously noted “People don’t know what they want until you show it to them”, and stated his job was “to read things that were not yet on the page”.
Long before that Henry Ford is attributed as saying “’If I’d asked customers what they wanted, they would have told me, “A faster horse!”’
All three entrepreneurs share the common philosophy of understanding what their customers need and then working backward “even if it means acquiring new skills”.
Applying the Amazon approach
Much of what Bezos refers to relies heavily on a business understanding its SWOT – Strengths, Weaknesses Opportunities Threats. But most particularly the Strengths and Opportunities.
Knowing your strengths
Whether it’s a product that no-one else provides or customer service that is second to none, every business has a strength that sees them outshine their competition.
The art is to know it, understand why it resonates with your client and build upon it within your business. And that comes down to entrenching the strength within your operation through your policies, procedures, planning and future skill acquisition.
In other words, if customer service is the strength that sets you apart from your competition, document exactly how each step of the customer experience occurs and what the expectations are so you can grow your business while maintaining and enhancing this attribute.
This allows you to offer the customer service strength on a greater scale, with each member of your growing staff understanding what needs to occur, when.
Then look to the future, and the possible threats that may impact this market differentiator. Will technology allow others to increase their hold in this space? Can your competitor step up and do what you do?
You’re looking to find which skills, technology or knowledge you or your staff will need to stay ahead of the game.
Opportunities – What do your customers need?
There are gaps in every market and the best in business have an innate way of filling them long before the consumer realises it was something they even required.
Kindle is Amazon’s best example of this, while tech giant Apple has a lengthy list of these innovations – the iPad, the iPod, the iPhone etc.
This field is not limited to products either, there are services that customers also want but in many cases are yet to know they need. In Amazon’s case it was online retail with next day delivery.
So how do you know what your customer wants? Well you can ask them through feedback, surveys and interaction or you can intimately understand who they are and the “problems” they face each day by creating a detailed customer persona.
Then you seek to acquire the skills that allow you to meet this product or service need. These skills might require you to gain a greater knowledge or tap the talents of those who already have it, but either way you are growing your business based on your customer’s requirements.
At Openseed we work with business to understand the internet playing field and how you can harness it to showcase your strengths.
We create intuitive branding, websites and quality content strategies that reflect the internet trends as they are now and will be in the future. Among the tools we harness to leverage your content for the greatest reach is Video, and we employ it on websites, social media and within advertising campaigns.
We do so in the knowledge great marketing is all about getting to the heart of your business message to help your business rank foremost on Google and at the front of your consumer’s mind. You can learn more about our services here or contact us directly to learn more about how we can help.