Leader in Ecommerce: 7 reasons why Amazon is so successful

“We see our customers as invited guests to a party, and we are the hosts. It’s our everyday job to make every important aspect of the customer experience a little bit better.” – Jeff Bezos

What first comes to your mind when you think of the biggest online retailers? I bet it’s Amazon. When it comes to the retail market, Amazon is dominant in ecommerce, leaving competitors in the dust. 

Here are some facts. In 2008, Amazon generated $232 billion from retail operations in the U.S. and abroad and sold 564 million products alone. The revenue increased by 31% from $177.9 billion in 2017 to $232.9 billion in 2018.  

How did Amazon become successful? This great success took years to achieve thanks to Amazon’s strategic approach to selling. Any retail company, regardless of what they sell, can learn from the Amazon success strategy on how to grow their ecommerce business and attract more customers. Here, we are going to explain what makes Amazon the brightest star in the sky. 

History of Amazon: How did Amazon become so successful?

Amazon.com Inc. (AMZN) is the world’s biggest online retailer, dealing with over 30 product categories (books, video games, fashion, computers, accessories, beauty products, electronics, and more). Since its launch, Amazon has come a long way from its modest start as an online bookseller to a global ecommerce giant. 

Amazon was founded by Jeff Bezos on July 5, 1994. At 30 years old, Bezos decided to quit his job and launched an Internet company.

“The first initial start-up capital for Amazon.com came primarily from my parents, and they invested a large fraction of their life savings in what became Amazon.com. My dad’s first question was, “What’s the Internet?” Okay. So he wasn’t making a bet on this company or this concept. He was making a bet on his son, as was my mother. So, I told them that I thought there was a 70 percent chance that they would lose their whole investment, which was a few hundred thousand dollars, and they did it anyway.”  – Jeff Bezos

Primarily Jeff named his company Cadabra, however, he later changed it to Amazon – after the Amazon River in South America. When Bezos launched Amazon, his business plan was to sell books for a reasonable price online and introduce competition to the existing retail book market. Over time, the company started to receive emails that customers would like to purchase CDs or DVDs in the same way. Eventually, Jeff Bezos made a decision to expand his retail business.

In 1996 the company introduced Amazon Associates (Affiliate) program that helps website owners, content creators and publishers, using link-building tools to direct blog readers to products on Amazon platform. When customers click on the links and purchase products from the marketplace, website owners and bloggers earn referral fees.

In the 2000s Amazon became a marketplace opened to third-parties. At the beginning of the new millennium, any merchant could start selling their products on Amazon by paying a fee and complying with the quality standards. Looking back, we can say that this has been one of Amazon’s critical success factors. This strategic move has given them a broad catalog, a great variety of products, and a free knowledge base to know what works and what doesn’t.

What makes Amazon successful?

Amazon is well-known for its organizational efficiency and a broad range of goods and services. Let’s have a look at seven key lessons you can learn from Amazon to make your retail business even more successful.

Personalized shopping experience

Amazon is at the zenith of success now due to providing each customer with a personalized shopping experience. The ecommerce leader uses a customized approach to address the needs of the customers, making them feel special and giving such focused attention. 

By carefully analyzing the customer browsing and purchase history and shopping behaviors, Amazon shows related items, a history of the products they’ve recently viewed and recommendations for new purchases.  Effective use of ecommerce analytics helps Amazon advertise more products, sell more items, and personalize customer shopping experiences.

Amazon takes personalization further by notifying customers if a chosen product is available. It prevents customers from adding products to their shopping cart only to discover at checkout that they can’t get it. 

What you should do

Track your customer’s purchases and make suggestions for them. When a customer gets back to the store, the website identifies his personality and remembers what the client has bought. “Related items you’ve viewed,” “Recommendations for you,” or “Items you may like” are some ideas for you to personalize the shopping experience. 

It may not be easy to implement these features on a website, so the alternative may be “Recently viewed products.” It might not be as discerning as Amazon’s personalization strategy; nevertheless, it will improve the average order value (AOV).

A customer-focused approach

One of the reasons why Amazon is so successful is due to its customer-focused approach. In every step of the buyer’s journey, no time is wasted: customers are given what they want right away. 

“The most important single thing is to focus obsessively on the customer. Our goal is to be Earth’s most customer-centric company.” – Jeff Bezos

Amazon has always worked hard on making things as seamless and user-friendly as possible. From the moment you land on Amazon’s homepage, everything from the right to the left corner is easy to navigate and dedicated to meeting all your needs. 

Everything Amazon does have a customer-oriented strategy, so it’s no surprise that Bezos delivered books to the local post office on his own when the company just started the way to ecommerce dominance. Thus, when Amazon started looking at expanding its offerings, they decided to send an email to 1,000 random customers and ask their opinion. 

What you should do

Make a customer-focused approach a core part of your company’s goals and objectives by selling various products and services based on their individual preferences. You should show the value of your products to the customers and collect feedback regularly to find out the preferences of your clients. The use of a quality CRM (customer relationship management) system can help you to put customers at the center of sales strategy.

Testing

Many websites neglect to test features of their stores and, as a result, are losing money. Amazon prides itself on its dedication to testing. Amazon runs 200 tests each month and tests every feature of their business, from product selection to checkout. 

“Our customers are loyal to us right up until the second somebody offers them a better service. And I love that. It’s super-motivating for us.” – Jeff Bezos

What you should do

Test your products regularly. For instance, conduct A/B tests by selling limited edition products to get customer opinion and send surveys to evaluate the user experience in your online store. Based on the given data, it’s easier to create innovative products, features, and services.

Reviews on products

Nobody wants to make a purchase without knowing what he/she is buying. Customers usually rely on someone else’s experience and buy items with more positive reviews than negative ones. Research shows that 45% of customers read reviews before purchasing. 

Surely, Amazon is also a pioneer here. The company was one of the first on the market to introduce a review system on its website in 1995. Since that time they have improved and added new features to the review system. When a new feature  (“Was this review helpful?”) was implemented to their review platform, Amazon started to earn $2.7 billion every year. 

Another crucial aspect of Amazon’s review strategy is that they use solicit reviews for each product separately. The majority of companies send emails asking for reviews of all purchased products together. Amazon sends different emails for different products, even if you bought several products at the same time. Therefore, if a customer liked or disliked a particular product, he/she will most likely to click on the email notification, rather than the generic email. 

What you should do

After your customers receive the products, send them emails asking to rate and give feedback. Product reviews can provide useful insights into your present product range, so you can constantly change and improve your offerings. Suggest rating the product from 1 to 5 stars, and leave your feedback. 

You can also encourage your customers to send photos of purchased products. Reviews with photos and videos describe products better than those that are text-only.

Outstanding customer service

Amazon is a leader in the ecommerce industry in providing excellent customer services. Amazon is aware of the particular needs of different demographics and goes to great lengths to fulfill them with new features. Amazon concentrates on making millions of global customers happy with affordable prices, free shipping, a broad range of products, on-time delivery, and great customer support.

“The best customer service is when the customer doesn’t need to call you, doesn’t need to talk to you. It just works.” – Jeff Bezos

Because of its commitment to preventing and promptly addressing customer problems, Amazon has developed a variety of helpful tools to track packages and swiftly return or exchange ordered products. 

Social networking is another powerful tool that Amazon adopted to engage with customers and enhance the quality of its customer service. Done properly, social media channels can help your retail business address consumer concerns and increase customer loyalty.

What you should do

The survey of Oracle stated that 73% of U.S. adults said a friendly customer service made them fall in love with a brand. Offering free shipping, sending a small present or giving a promotional code will show that you care about every customer.

Moreover, don’t forget to provide your customers with multiple options to get in touch with you. Implement self-service FAQs or community forums addressing your customer concerns.

Loyalty programs

Amazon introduced Amazon Prime in 2005 and positioned it as a paid membership service. Prime has evolved since then and now offers multiple advantages such as special discounts, quicker delivery, cloud storage, reduced or free shipping rates, cheaper prices; unlimited access to various online movies, TV shows, music streaming service Amazon Music, and Kindle lending library. 

A crucial aspect of all of these benefits is that they’re ongoing. Instead of giving customers one-time perks for every purchase, Amazon provides its loyalty members with a whole reward ecosystem. The loyalty program does a great job of attracting visitors to the ecommerce store and encouraging them to buy something. 

What you should do 

Create a program that offers rewards to keep your customers coming back to the store and reap the benefits of special offers. For instance, add free shipping, discounts, faster delivery, and other membership perks. Offer bonuses during special occasions like customer birthdays or a membership anniversary. Add more advanced features to the loyalty program. 

Constant innovations 

Innovation is the keystone of Amazon. Amazon’s ecommerce strategy largely derives from its innovative technologies and practices, the majority of which were initiated by Jeff Bezos. Amazon regularly updates the system and introduces new concepts to customers. 

“My view is there’s no bad time to innovate.” – Jeff Bezos

Amazon’s innovation strategy is customer-oriented. The services provided by the company have been significantly upgraded in recent years by implementing advanced technologies. Consider Amazon’s innovative technologies – like the Echo, an impressive voice-controlled tech. 

The Echo can be used to research the most popular movies, play songs, and even check the weather forecast. Amazon has gone even further and introduced to the world its smart speaker tech – the Amazon Echo Dot and the Amazon Echo Show aimed to please customer needs.

Amazon keeps progressing in its commitment to trying new things. The company always thinks of innovative ways to keep their customers happy. Whether it’s by introducing features like product reordering or access to new movie programming as part of Prime membership, Amazon is always searching for new possibilities to evolve.

What you should do

Follow ecommerce trends. Listen to what your customers are saying on social media networks. Ask your customer support managers to take into account any insights they get when customers call or leave their feedback. Visit all possible forums where customers share information and use it as an opportunity to learn something new from them to develop your retail business globally.

Bottom Line

With a win-win mindset and open arms for new ideas, Amazon experimented and learned lessons over time to become the ecommerce giant. Amazon’s business success story speaks all about the ecommerce company’s ability to create customer loyalty, launch new products, provide an outstanding user experience, and eagerness to keep innovating.

Launching a web store that will become Amazon’s competitor is not a month-term business. It requires much time and detailed analysis before making the first step. Are you ready to become a #1 world online retailer? Leverage lessons mentioned in this article and you don’t have to wait years to see results but boost your growth right now. 

Looking for an ecommerce development partner? Elogic is always at your service!