Amazon (AMZN)

Amazon.com, Inc. provides online retail shopping services. It provides services to four
primary customer sets: consumers, sellers, enterprises, and content creators. The company
also provides other marketing and promotional services, such as online advertising and co-
branded credit card agreements. It serves consumers through its retail websites with a focus
on selection, price, and convenience. It designs its websites to enable its products to be sold
by the company and by third parties across dozens of product categories. The company also
serves developers and enterprises of all sizes through Amazon Web Services, which provides
access to technology infrastructure that enables virtually any type of business. The company
operates through three segments: North America, International, and Amazon Web Services.
The North America segment includes retail sales of consumer products and subscriptions
through North America-focused websites such as www.amazon.com and www.amazon.ca.
The International segment includes retail sales of consumer products and subscriptions
through internationally-focused websites. The Amazon Web Services segment includes
global sales of compute, storage, database, and other AWS service offerings for start-ups,
enterprises, government agencies, and academic institutions. Amazon.com was founded by
Jeffrey P. Bezos in July 1994 and is headquartered in Seattle, WA.

Amazon.com mission and vision

When it first launched, Amazon’s had a clear and ambitious mission. To offer:

Earth’s biggest selection and to be Earth’s most customer-centric company.

Today, with business users of its Amazon Web Service representing a new type of customer,
Amazon says:
this goal continues today, but Amazon’s customers are worldwide now and have grown to
include millions of Consumers, Sellers, Content Creators, Developers, and Enterprises. Each
of these groups has different needs, and we always work to meet those needs, by innovating
new solutions to make things easier, faster, better, and more cost-effective.

20 years later, Amazon are still customer-centric, in fact, in the latest Amazon Annual report,
Jeff Bezos of Amazon explains what he calls True Customer Obsession :

"There are many ways to center 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."

Amazon's growth

In 2019, Amazon's total annual revenue stood at $280.5 billion, and it is expected to grow
again in 2020, some estimates predict to $334.7 billion. Amazon performs exceptionally
efficiently measured against revenue per visitor, which is one of the key measures for any
commercial website, whether it's a media site, search engine, social network or a transactional
retailer or offers travel or financial services. Of course profit per user would be quite different
due to the significantly lower costs of other .coms like Facebook and Google.
Note: SEC is the Securities and Exchange Commission (SEC) which is a government agency for
which companies have to submit an open evaluation of their business models and marketplace
conditions.

Service Excellence factors of Amazon:

Customer Focus: Amazon’s ideas are customer centricity, they put the customer at
the center of everything they do.

Indeed, the company has made an art of finding new and better ways to improve customer
experience, some of which include:

 Offering fast, hassle-free ordering and delivery.

 Using data to personalize, helping shoppers in real time with product selections based
on browsing and buying history.

 Going out of its way to help customers get the best deal.

Price Factor: Because the price is such an important part of a consumer’s experience, their
aim is to have the lowest price on the internet. And, they are succeeding. The Buy Box fosters
competition within the platform to keep it low.

Each unique product has only one product page despite representing several listings. When a
user clicks “buy” they are selecting to purchase from the seller who has won the Buy Box
(red). Winning the Buy Box puts seller at a significant sales advantage, winning 85% of the
sales, for that item.

‘Buy Box’ win is based on three factors in roughly this order:

 Price
 Rating
 Delivery Speed

Having a comparatively low price is one of the most important aspects of winning the Buy
Box, without competitive pricing your products won’t sell.

Delivery Factor: Amazon has one of the most advanced fulfilment networks in the world,
resulting from:

 Advanced logistics.
  Innovative technology, powered by Amazon Robotics.
 175 fulfilment centres worldwide operating 24 hours.

FBA, or Fulfilment by Amazon. Taking on the storing, picking, packing and shipping
allows Amazon to control the quality of consumers’ delivery experience while offering an
elegant solution to their sellers who would otherwise struggle to deliver according to
Amazon’s rigorous standards.

This means that Amazon can be sure that it is done right – that means quickly and accurately
– as often as possible.

Customer Empowerment

Amazon do not simply sell stuff but “help customers make purchase decisions.”

This attitude led to the key differentiator of allowing customers to post book reviews and,
eventually, reviews of the entire range of products offered on the web site.

Feedback is placed directly on the product’s page and users are provided with multiples ways
to parse the information to their liking.

While customer reviews are seen everywhere today – Yelp, Uber, TripAdvisor – Amazon
was the first to display such reviews, creating a more transparent e-retail space with two
key benefits for the consumer:
  Prior to customer reviews, internet shoppers were essentially shopping in the dark, but
thanks to Amazon the customer has readily available knowledge with which to make
purchase decisions.

 Manufacturers are now held even more accountable for the quality of their products,
knowing that customers are sharing everything with one another.

Customer Loyalty: Amazon focuses on one simple measure of customer service

quality: helpfulness.

They regularly interact with customers through non-intrusive and easy-to-use satisfaction

surveys. The surveys are an effective tool for building sales and turning customers into loyal
enthusiasts.

Analytics are at the heart of the company’s success with surveys acting as a critical tool for
understanding the customer experience.

They opt for a smooth way of proposing their survey to their customers i.e., through an email,
as below:

Top Customer service and Customer Experience strategies:

Because CEO decisions aren’t enough, Amazon makes sure that people in the company
internalize the vision. Whether entry level or executive, many Amazon employees have
opportunities to attend two days of call-center training. The goal: get them to learn how to
listen – not just talk – to customers. When you listen, you understand. And through
understanding, you can take the appropriate steps to meet the needs of your customers.

 Amazon has an incredibly detailed yet easy-to-navigate help center, which lets you
drill deep into a number of specific concerns. Under the hood, there are thousands of
articles, but the surface experience is streamlined, visually appealing, and in sync with
the website’s shopping experience where users search by category or by specific need.
With streamlined help and customer service paths, shoppers save time and feel
empowered as they find their own solutions.
 Amazon has made it easy for shoppers to tap into the wisdom of the crowd to get their
customer support. The benefits are numerous. When customers help one another,
Amazon’s service representatives can handle customer requests at a faster pace. And
those users who do help one another get the satisfaction that comes with knowing they
are part of a community.
 If Amazon’s self-service FAQs or community forums can’t solve the problem,
customers have the option of reaching out to a real person. Callers get 24/7 support
and are almost never put on hold. Amazon has also amazed with a free customer
support service called “Mayday.” Owners of Amazon Fire phones can tap a
“Mayday” button and get instantly connected via video to a tech advisor. The user
sees the advisor live while the advisor only sees what’s on the phone screen.
 The company builds relationships between its shoppers and hosted brands. Last year
the company launched Amazon Exclusives, an initiative for entrepreneurs who want
to promote their story. In the spirit of a crowdfunding website, the videos help
shoppers feel more personally connected to the company and its products.