ECommerce success story: The history of Amazon (3)

Let’s close the Amazon Success Story with this chapter. After knowing its origin and the first milestones that marked its growth; today, we focus on its present and near future.

From our point of view, what makes this case study so valuable is that we are talking about a giant that has revolutionized e-commerce as it has grown. We can say that these are processes that have occurred in parallel.

Precisely because of this, you should pay close attention to what will happen with Amazon in the future. Amazon’s experience and knowledge in eCommerce can reveal a lot of what will happen, and following their lead will help you position yourself.

It’s been almost 10 years since the Kindle launched. In other words, it’s not really a recent product. Nonetheless, it has been such a brilliant move that it’s worth studying.

Amazon was born, as you already know, as an online bookstore. As the electronic books or eBooks became popular, Bezos’ employees found, in what probably was a hard blow to the main line of business of others with not so quick reflexes, another line of business.

Not only did they start selling eBooks in their marketplace, they also launched their own eBook’s readers: Advanced-yet-affordable devices that are in high demand even today.

This strategy has given them many joys, and it worked so well that it evolved into a service called Kindle Unlimited, which is known as the Spotify of books: you pay a monthly fee to have access to a huge books’ library.

Amazon, instead of fighting against this new format made it part of its strategy and even boosted the consumption by launching the Kindle and other related services. EBooks are logistically much more efficient than paper books, not to mention the gross margin can be the same or even higher than them even if the price is lower.

Amazon was also a forerunner in exploiting affiliation, a strategy quite popular now. Amazon’s program was patented in 1996 and since then, it hasn’t stopped growing.

For those who don’t understand the concept, you can think about it as a system through which the users themselves work as a commercial network. They are given a username and all purchases made through their unique ID are tracked. In return, they get a percentage of the sale.

This is one of the least obvious things. The move is clear, but there hasn’t been any real statement about it.

A few months ago, Amazon revealed a smart physical store with no cash registers in which the money was automatically withdrawn from the customer’s card through an app, thus eliminating the need to physically walk through a cash register. The store is called Amazon Go, and for now, it’s just a beta pilot for employees.

The thing is that, almost immediately, they acquired  Whole Foods, one of the most popular supermarket chains in the US, in which Amazon already sells some of its products. This also coincided in time with the boost to its distribution of fresh products strategy, expanding the market penetration to many more countries.

Another of Amazon’s obsessions is logistics. With its Prime program, it was already evident that Amazon understood that what the users want are immediacy and short delivery times. When it launched the Prime Now program things got interesting, it took logistics to the same day territory with one-hour deliveries.

In addition to this, Amazon is always exploring new options. In spite of everything, the drone strategy does not seem very viable in the short term. However, programs like Flex, in which individuals can act as delivery drivers, the pickup points network Amazon Locker, where we can pick up the packages ourselves, are a reality that is already here.

Future trend. Internet of Things seems to be the next eCommerce’s battlefield.

If the first foray of Amazon was somewhat anecdotal with the use of the    Dash Buttons  -small connected buttons used to buy a single product with high rotation-, the second incursion with the    Echo devices is much more determined.

These speakers are a different way of interacting with eCommerce as they allow us to buy using voice commands through the Alexa assistant. And that really is THE trend.

That’s it: Amazon’s success story is officially over. We could continue because its story is almost endless, but the truth is that the main points are clear and have been thoroughly explained in these 3 extensive posts.