Amazon has been a game changer across many different industries by leveraging digital technologies to consistently evolve and grow, regularly building on previous progress. The initial core values for the company laid out in its initial 1997 Letter to Shareholders accurately reflect its vision for achieving success through relentless customer obsession and a focus on long term growth by leveraging technology and accurate metrics. [1] Interestingly, Jeff Bezos couples the ideas in this letter with a focus on everything being Day 1, meaning that they must always think about growing, innovating, and delivering\/capturing customer value as though the company was just beginning and do so in a systematic, measured manner. This commitment is reiterated throughout the company and to shareholders as exemplified by the fact that the initial Letter to Shareholders from 1997 has been included in every annual report since then. Digital technologies and innovation are part of Amazon\u2019s DNA.<\/p>\n
What did Amazon do differently?<\/strong><\/p>\n Remember getting textbooks at the book store or being frustrated when you couldn\u2019t find a particular book you needed at the library? Amazon\u2019s first step was to disrupt the business of selling books, providing an avenue for customers to search for and buy their books online and then receive them in the mail. The convenience and low cost of this caused a significant amount of trouble for brick and mortar book stores. Amazon didn\u2019t stop there, but instead began spreading into other markets by selling appliances and many other items through the same online portal, Amazon.com. It went further by leveraging the digitization of physical items like books, movies, and music through offerings like downloadable books, Amazon Prime Music, and Amazon Instant Video. This allowed Amazon to offer a wider range of selection for customers while consistently cutting down costs, like inventory and warehouses. Take the Star Wars Force Awakens movie where a standard Blu-Ray costs around $35 while a digital download of the same movie costs $20 in HD [2]. Furthermore, customers can stream the content meaning that they can access it anywhere as long as they have an internet connection.<\/p>\n How did Amazon do this?<\/strong><\/p>\n Amazon delivered content to users where they wanted it and how they wanted it in a fast and cost effective manner. On top of this, they learned from customer behaviors and helped customers through either suggestions or by providing further means to access content through a single platform. Amazon has consistently expanded the way that customers can access its services. The platform initially leveraged the early Internet to connect buyers to its offerings, eventually broadening this to connecting buyers to other sellers\/vendors through the same channel. As it grew, it began to leverage cloud technologies and economies of scale for its underlying infrastructure, which kept costs to a minimum and allowed them to rapidly scale without sacrificing quality or pricing for customers. Gradually Amazon moved onto mobile phones, tablets, and other technologies that allowed users to use Amazon whenever they wanted. Amazon would also relentless monitor and track metrics around its performance in all areas, constantly seeking to improve speed, accuracy, and cut costs. The impact of all of this work can be seen in the growth of Amazon as well as how they have grown compared to other retailers in terms of cumulative percentage change in market cap and their size as depicted in a Wall Street Journal article (screenshot below). [3]<\/p>\n Amazon further used technologies such as Machine Learning to provide customized and tailored experiences for customers. Usage of the site would be tracked and algorithms on the backend would be run, which would return product suggestions or recommendations based on past behavior or other similar customers. Amazon would also use this information to optimize its site designs and structures. In a unique show of further customer support and transparency, Amazon has also been providing access to these technologies to the public through its Cloud offerings. [4]<\/p>\n Keeping the Pace<\/strong><\/p>\n As new digital technologies have continued to be developed, Amazon has sought to stay on the front end of this wave. Amazon\u2019s \u201cInternet of Things\u201d button is an example of their commitment to reach customers directly as it provides a simple \u201cbuy\u201d button that you can stick on to a washing machine (for example) and press whenever you run out of detergent. [5] As it grows, Amazon needs to keep pushing the envelope by building, adapting, and implementing new solutions enabled by technology. Drones for delivery, Alexa, and distribution center automations are other recent examples of these endeavors. A critical area of focus should be on creating seamless platform that facilitates and eventually fully anticipates needs through Machine Learning and customer analytics, while focusing on cutting costs through economies of scale, renewable energy solutions, and other efficiencies. \u00a0(799 words)<\/p>\n <\/p>\n [1] Bezos, Jeff. \u201c1997 Letter to Shareholders.\u201d http:\/\/media.corporate-ir.net\/media_files\/irol\/97\/97664\/reports\/Shareholderletter97.pdf<\/a><\/p>\n [2] Star Wars Force Awakens Amazon Page: https:\/\/www.amazon.com\/Star-Wars-Force-Awakens-Theatrical\/dp\/B019G7X9E6\/ref=sr_1_2?s=instant-video&ie=UTF8&qid=1479502047&sr=1-2&keywords=force+awakens<\/a><\/p>\n [3] Prince, Marcelo and Slobin, Sarah. \u201cHow 20 Years of Amazon Changed Retail.\u201d http:\/\/www.wsj.com\/articles\/how-20-years-of-amazon-changed-retail-1436998020<\/a><\/p>\n [4] Finley, Klint. \u201cAmazon Giving Away The AI Behind Its Product Recommendations.\u201d https:\/\/www.wired.com\/2016\/05\/amazons-giving-away-ai-behind-product-recommendations\/<\/a><\/p>\n