  {"id":3028,"date":"2017-02-02T15:34:30","date_gmt":"2017-02-02T20:34:30","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/amazon-winner-of-current-generation-of-e-commerce\/"},"modified":"2017-02-02T18:23:46","modified_gmt":"2017-02-02T23:23:46","slug":"amazon-winner-of-current-generation-of-e-commerce","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/amazon-winner-of-current-generation-of-e-commerce\/","title":{"rendered":"Amazon: winner of current generation of e-commerce"},"content":{"rendered":"<p class=\"p1\"><span class=\"s1\">Founded in 1995, Amazon started its internet retail business by selling books and then expanded\u00a0to sell all goods. It has now evolved into a giant technology company that sell goods with AI and provide customers with new shopping experience powered by advance technology. Starting with an architectural innovation, it took almost a decade to experiment new business models and finally win and accrue its investment. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\"><a href=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Screen-Shot-2017-01-31-at-9.09.11-AM-2.png\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-3014 aligncenter\" src=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Screen-Shot-2017-01-31-at-9.09.11-AM-2-300x55.png\" alt=\"Screen Shot 2017-01-31 at 9.09.11 AM 2\" width=\"610\" height=\"112\" srcset=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Screen-Shot-2017-01-31-at-9.09.11-AM-2-300x55.png 300w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Screen-Shot-2017-01-31-at-9.09.11-AM-2-768x140.png 768w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Screen-Shot-2017-01-31-at-9.09.11-AM-2-1024x187.png 1024w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Screen-Shot-2017-01-31-at-9.09.11-AM-2-600x110.png 600w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Screen-Shot-2017-01-31-at-9.09.11-AM-2-1100x200.png 1100w\" sizes=\"auto, (max-width: 610px) 100vw, 610px\" \/><\/a><\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">The rise in stock price is a strong signal that Amazon is winning[1]. Looking closer, Amazon has following attributes\u00a0that make it a winner in the online\u00a0retail\u00a0space:<\/span><\/p>\n<ul>\n<li class=\"li1\"><span class=\"s1\">Seamless\u00a0online shopping experience<\/span><\/li>\n<li class=\"li1\"><span class=\"s1\">Leveraging advanced technology and data<\/span><\/li>\n<li class=\"li1\"><span class=\"s1\">Unbounded by existing business model<\/span><\/li>\n<\/ul>\n<p class=\"p1\"><span class=\"s1\"><b><i>Seamless online shopping experience<\/i><\/b><\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Setting Amazon Web Service (AWS) aside, Amazon creates value by providing best online shopping experience. First, it is a one-stop shop. Starting by offering the most comprehensive selection of books, it saved consumers trips across cities to find books. Then it expanded to include other goods, and now customers can almost get everything on Amazon. In addition, it ensures low price, fast delivery and easy return to compete with both brick and mortar and online retailers. Thus, it would be as similar as to buy and return goods in a physical store. Launched in 2015, Prime Now can deliver goods to members within an hour[2].<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">In addition to fulfilling\u00a0basic expectations of shopping experience, Amazon offers new services, such as 1-Click<\/span> <span class=\"s1\">shopping, reviews, recommendation, and AI robots, Alexa, to assist and facilitate consumers\u2019 shopping experience. Consumers, may initially be attracted by Amazon\u2019s vast options\u00a0or convenience, and then stick with Amazon for its seamless service.<\/span><\/p>\n<p class=\"p1\"><a href=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/maxresdefault.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-3017 aligncenter\" src=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/maxresdefault-300x169.jpg\" alt=\"maxresdefault\" width=\"300\" height=\"169\" srcset=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/maxresdefault-300x169.jpg 300w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/maxresdefault-768x432.jpg 768w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/maxresdefault-1024x576.jpg 1024w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/maxresdefault-600x338.jpg 600w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<p class=\"p1\"><span class=\"s1\"><b><i>Leveraging advanced technology and data<\/i><\/b><\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">However, if it is only about creating values, Amazon is not winning. It is winning now because it is also able to capture value through selling<\/span>\u00a0a wide range of products and services to customers at low cost.<\/p>\n<p class=\"p1\"><span class=\"s1\">Just like other internet retailer in the 90s, it did not need physical store to start with at the beginning. In addition, it operated differently. Instead of storing all the goods it sells, it only kept fraction of it and ordered from distributors until a customer has placed an order. This largely increased inventory turnover and allowed flexibility in financing sales[3]<\/span><span class=\"s1\">. New types of relationship with distributors and customers were emerging, and Amazon was a\u00a0pioneer in the field. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Amazon identified this new trend and embraced it by\u00a0experimenting with advanced technology and data analytics. For example, Amazon adopted\u00a0the concept of Big Data Analytics fairly early. It studied the behaviors of its customers to serve them better, such as by making recommendations, and learned patterns from data to optimize logistics and service. Just like Target used predictive analytics to predict needs and send out coupons, Amazon applied analytics to forecast sales and speed up delivery[4]. It also kept trying different new technology, such as drones, to facilitate the whole deliver process while lowering the cost. It has now developed a warehouse management system and a driver-facing app that allows same day delivery with manageable\u00a0cost[5].<\/span><span class=\"s1\"> As such, Amazon is able to capture the value while staying competitive and leading the e-retail industry\u00a0[6].\u00a0<\/span><\/p>\n<p class=\"p1\"><em><strong><span class=\"s1\"><a href=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Screen-Shot-2017-02-01-at-3.25.01-PM.png\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-3018 aligncenter\" src=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Screen-Shot-2017-02-01-at-3.25.01-PM-300x204.png\" alt=\"Screen Shot 2017-02-01 at 3.25.01 PM\" width=\"328\" height=\"223\" srcset=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Screen-Shot-2017-02-01-at-3.25.01-PM-300x204.png 300w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Screen-Shot-2017-02-01-at-3.25.01-PM-768x523.png 768w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Screen-Shot-2017-02-01-at-3.25.01-PM-1024x697.png 1024w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Screen-Shot-2017-02-01-at-3.25.01-PM-600x408.png 600w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Screen-Shot-2017-02-01-at-3.25.01-PM.png 1372w\" sizes=\"auto, (max-width: 328px) 100vw, 328px\" \/><\/a><\/span><\/strong><\/em><\/p>\n<p class=\"p1\"><em><strong><span class=\"s1\">Unbounded by existing business model<\/span><\/strong><\/em><\/p>\n<p class=\"p1\"><span class=\"s1\">Another key element that contributes Amazon\u2019s current success is that the organization is never stop innovating, including innovating in architecture. AWS is a great example. Amazon need data warehouse to store and process large data and orders generated on <a href=\"http:\/\/amazon.com\"><span class=\"s5\">amazon.com<\/span><\/a>. The managerial team was prudent to the need of similar infrastructure from smaller online retailers and open to extend this as another business of Amazon. Amazon is not confined in its own internet retail business but further advance with technology. For its investment in technology, such as big data and AI, it developed Alexa to compete with Apple and Google. It hence also evolves into\u00a0a technology company.<a href=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/All-Things-Amazon.png\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-3019 aligncenter\" src=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/All-Things-Amazon-300x100.png\" alt=\"All-Things-Amazon\" width=\"300\" height=\"100\" srcset=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/All-Things-Amazon-300x100.png 300w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/All-Things-Amazon-600x200.png 600w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/All-Things-Amazon.png 750w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">For these three elements, Amazon is definitely winning the game it starts with Barnes &amp; Nobles. At the same time, it is also entering a new game<\/span><span class=\"s1\">\u00a0with other technology giants, such as Google and Apple. It is remained to be seen how this\u00a0game about AI and smart home to be played out.\u00a0<\/span><\/p>\n<p class=\"p1\">[1] Google Finance as of Feb 2, 2017<\/p>\n<p class=\"p1\">[2] Amazon 2015 Annual Report<\/p>\n<p class=\"p1\">[3]\u00a0<span class=\"s1\">INVESTING IT; Does Amazon = 2 Barnes &amp; Nobles, July 19, 1998, see:\u00a0<a href=\"http:\/\/www.nytimes.com\/1998\/07\/19\/business\/investing-it-does-amazon-2-barnes-nobles.html\"><span class=\"s2\">http:\/\/www.nytimes.com\/1998\/07\/19\/business\/investing-it-does-amazon-2-barnes-nobles.html<\/span><\/a><\/span><\/p>\n<p class=\"p1\">[4] <span class=\"s1\">Why Amazon&#8217;s Anticipatory Shipping Is Pure Genius, Jan 28, 2014, see: http:\/\/www.forbes.com\/sites\/onmarketing\/2014\/01\/28\/why-amazons-anticipatory-shipping-is-pure-genius\/#7754e3b02fac<\/span><\/p>\n<p class=\"p1\">[5] Amazon 2015 Annual Report<\/p>\n<p class=\"p1\">[6] Chart from statista:\u00a0https:\/\/www.statista.com\/statistics\/293268\/mass-merchant-us-e-retailers-market-share\/<\/p>\n","protected":false},"excerpt":{"rendered":"<p>First to enter the battle between brick-and-mortar and online retailers, Amazon has won by providing seamless one-stop shopping experience and leveraging technology to capture value. Since then, It has also evolved into a technology company. As we enter a new era of internet of things and AI, can Amazon continue to win?<\/p>\n","protected":false},"author":2781,"featured_media":0,"comment_status":"open","ping_status":"closed","template":"","categories":[7],"class_list":["post-3028","hck-submission","type-hck-submission","status-publish","hentry","category-winner"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-digit\/assignment\/digital-winners-losers\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Amazon: winner of current generation of e-commerce - Digital Innovation and Transformation<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-digit\/submission\/amazon-winner-of-current-generation-of-e-commerce\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Amazon: winner of current generation of e-commerce - Digital Innovation and Transformation\" \/>\n<meta property=\"og:description\" content=\"First to enter the battle between brick-and-mortar and online retailers, Amazon has won by providing seamless one-stop shopping experience and leveraging technology to capture value. 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