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Amazon

A mission to become the world's most customer-centric business

Sector: Futurestore
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Amazon, from Dash to drones, Alexa and Echo, uses technology to disrupt and redefine a range of adjacent industry, and then do it again, whilst adding new business models that create a convenient and personalised customer experience.

Jeff Bezos laughs with a distinctive cackle. He is still the hands-on CEO, strategist and innovator, keeps a relatively low profile, but his innovations have become bolder. His Kindle Fire, significantly better than his early e-book reader, is now challenging the iPad, whilst his repurposing of books into short-read “singles” is challenging the whole book trade. The development of self-publishing has helped Kindle “own” content, whilst acquisitions of rivals such as Audible’s talking books in 2008, LoveFilm movies on demand and The Book Depository in 2011, whilst two years later Goodreads has consolidated its position, and extended the customer experience.

Zappos, famed for its customer service became part of Amazon in 2009, and more of General merchandising has been a big success, with the acquisition in 2010 and rapid expansion of Quidsi from personal care to pet supplies, toys, and groceries. This included more brands to add to the Amazon portfolio, and sourced through its main website, include Diapers.com, Soap.com and BeautyBar.com. There is also the development of streaming-video services to include CBS and Fox movies.

Whilst Amazon has acquired around 50 businesses as it has grown and diversified, it keeps the businesses small and distinctive, whilst connecting them through the retail platform. Zappos, for example, which started by selling shoes, has built a much-admired culture of happiness. CEO Tony Heish recalled his early days “Women don’t buy more shoes because they need them, but because it makes the happy. We therefore don’t deliver shoes, we deliver happiness”.

The $75 billion business is truly international, with versions in everything from Chinese and Japanese, to Spanish and Brazilian Portuguese. Whilst the profits from its devices and content sales have been much slower than Apple’s, Amazon has always played a longer-term game, shaping the market first, then letting the rewards follow

Bezos likes to point out the shift in power from companies to consumers, yet Amazon becomes more powerful every day. The Kindle Fire now rivals the iPad, Amazon Prime’s annual membership that gives free next-day shipping was a masterstroke, whilst the same-day grocery delivery service Amazon Fresh is set to transform behaviours and expectations further. And we wait to see whether the former investment banker’s vision of 30 minute delivery by mini-drones will come true.

Pivot points for Amazon in “changing the game” of retail has been:

  • Explore: Making sense of changing markets, finding the best growth opportunities
  • Disrupt:  Shaping the markets in your own vision, rewriting the rules of play
  • Design: Creating business models that are consumer-centric and scalable
  • Enable: Delivering a more personal, sticky and contagious customer experience

Amazon is just at the beginning of its journey, says Bezos. Talking to his recently acquired Washington Post he said “In a sense it’s still day one. There’s still so much you can do with technology to improve the customer experience. And the rate of change continues to accelerate”.

 

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