Since its inception in 1995, Amazon has remained one of the biggest (and influential) companies in the ecommerce market. In just its first-quarter earnings this year, Amazon reported a revenue of at least $75.45 billion—exhibiting strong online sales despite the current pandemic. Along with its impressive sales, Amazon has also proven itself as a powerful […]
Since its inception in 1995, Amazon has remained one of the biggest (and influential) companies in the ecommerce market. In just its first-quarter earnings this year, Amazon reported a revenue of at least $75.45 billion—exhibiting strong online sales despite the current pandemic. Along with its impressive sales, Amazon has also proven itself as a powerful influence in the industry with its high popularity and reach among consumers.
The secret behind Amazon’s success is evolution. Over the years, Amazon has been able to adapt to the constant changes in shopping and technology trends. The rise of the Internet and digital devices, for instance, has permanently changed the way consumers shop. According to survey data from Pew, in 2000 only 22% of Americans had ever shopped online compared to 80% today.
And while most online stores stuck to one type of product or service, Amazon did the exact opposite—it expanded what it offered to its consumers. This decision to diversify their services with the market trends allowed them to continually meet the interests and expectations of their customers. As a result, Amazon cemented itself as a leader in the ecommerce market, helping it evolve to their customer’s benefit, all while simultaneously growing their own company on a regular basis.
Of course, you may be wondering what Amazon’s success in ecommerce has to do with your own company. Since Amazon has marked such an impact in ecommerce, it’s important to keep in mind how this influence ripples into your own services and marketing strategy.
Amazon’s impact in the ecommerce world is often summarized in one phrase: The Amazon Effect. But what is it exactly? Well, its meaning varies depending on each respective industry. Generally, the Amazon Effect refers to the difficulty many companies face when directly competing with Amazon.
And for any company in the ecommerce industry, it is incredibly challenging to compete with Amazon. As AJ Agrawal from Entrepreneur writes, “the online retailer’s vast selection, fast shipping, free returns, low prices and “Prime” subscription service all serve to create high customer expectations for any retailer hoping to compete.” These high expectations are things retail companies must keep in mind when offering services to their customers. Fortunately, numerous retailers have been able to effectively compete with Amazon for customers by adapting their services to meet their customers needs.
One of Amazon’s innovations includes their development of “one-click shopping”. Until 2017, Amazon was the only online retailer that offered this purchasing method to customers. This feature raised the bar in how online retailers delivered their products to customers. When customers were ready to make a purchase on their website, they weren’t required to re-enter their information if they had shopped there previously. Instead, with just one click, the order would be ready.
This feature also gives customers the option to reorder items as many times as possible without the hassle of re-entering payment information or answering additional inquiries. One-click shopping, essentially, helps create a positive shopping experience for customers who are looking to make quick purchases online.
Since 2005, Amazon has offered a subscription service known as “Amazon Prime.” Through Amazon Prime, customers can choose their ordering process, receive a free two-day or same-day delivery, and stream their favorite movies and TV shows. This service has helped shape the pace of the ecommerce market and what it can offer to customers.
Amazon also further supplemented their services with their return policy. This policy allows customers who are dissatisfied with their product to receive a full refund. There are also occasions where Amazon will let customers keep the product without a fee. While numerous companies are trying to mirror Amazon’s innovative services, it’s no easy feat. Retailers are under constant pressure to meet the high expectations set on by Amazon through its speed and efficiency.
Along with ecommerce, Amazon’s impact has also extended into the marketing realm. Amazon has always focused on a customer-first approach to their marketing strategy, as seen through their evolution over the years. As a whole, their company has adapted to the preferences and purchasing behavior of their customers by optimizing their products.
Amazon typically performs this type of marketing based on what their customers buy. Once a customer makes a purchase, Amazon will optimize their feed to give the customer exactly what they want based on their history. Their customer-centric marketing strategy has caught on with other ecommerce providers as a way to make their customer’s purchasing experience more comfortable.
The Amazon Effect has been a real game changer in the ecommerce and marketing world. Due to their ability to prioritize their customer’s needs and adapt to ever-changing technology, it’s safe to say that Amazon will be around for a long time. However, it doesn’t mean that Amazon is the only ecommerce competitor that will matter in the future. Soon enough, there may be emerging companies that will provide Amazon with fierce competition as the current ecommerce trends shift and evolve.
One of the ways you can match Amazon’s impact is to cultivate a strong brand. Read our blog, How to Strengthen Your Brand Right Now to learn more about how you can build a consistent brand for your business.