Amazon.com e-commerce case study

Amazon.com E-commerce Case Study

How did Amazon evolve from an online bookstore to become a world-class company that can compete with century-old industrial giants? The answer lies in its continuous exploration of new business models built on technological innovation. When a cash cow in the Boston matrix, began to steady and persistent business model innovation, its competitors have every reason to be afraid. Here is my analysis of Amazon.com's e-commerce case for you, welcome to read and browse.

B2C model of ? subscription? style shopping

This is a program known as ? Subscribe and Save? program, an automated subscription service designed by Amazon.com specifically for some everyday consumer products, such as packaged foods, toiletries, health care products, baby products, etc., similar to the familiar newspaper and magazine subscriptions.

Users can select those items that need to be purchased frequently, and then join this service and set the interval of delivery. In order to increase the attractiveness of this service, Amazon set up a lot of preferential conditions, including providing up to 15% discounts, prioritizing order processing and shipping, allowing users to change or cancel the order at any time, keeping the price stable and so on. These favorable conditions may seem ordinary, but once relying on Amazon, the largest B2C platform on earth, the attraction can not be underestimated.

As the best practitioner of the long tail theory, Amazon.com undoubtedly offers the largest range of products in the retail industry. In particular, Amazon is the only retailer in the world that can guarantee a constant supply of those items that are at the end of the long tail. There are many consumer goods offered by Amazon that are not available in all supermarkets, and if they are, they are often out of stock or overpriced. Amazon, on the other hand, is able to provide consumers with a steady supply, which, combined with the fact that Amazon.com does not charge GST on purchases and offers free shipping and other discounts, makes this ? subscription? style of shopping impeccably priced.

For Amazon itself, pushing this? Subscribe and Save? service, although reducing the price of goods, reducing the unit sales revenue, but can reduce inventory costs, increase user stickiness to bring a positive impact. Especially for those long-tail goods, due to the demand compared to the mass of goods is much smaller, its warehouse shipments are very uncertain. And when a certain number of users to join this ? subscription? based shopping service, the site's frequency and volume of shipments become predictable. These data are not only an important basis for Amazon to sign contracts with suppliers, but also a favorable bargaining chip for price negotiations with suppliers.

Digital Music Stores

We all know Apple's famous music store, iTunes, and in fact, back in 2007, Amazon launched its own online music store, Amazon MP3? Amazon MP3? The biggest selling point of Amazon's music store at the time,

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It's that none of the millions of tracks it sells use digital copy protection technology. Consumers can copy songs to multiple computers, burn them to CDs, or transfer them to iPods, iPhones, and the Microsoft Zune for playback. Prior to the launch of Google's first Android phone, the G1, in 2008, Amazon entered into a partnership with Google to preload its digital music store onto every G1 phone. After a few years of development, Amazon MP3's presence in the hearts and minds of music lovers grew, and in 2009, three senior editors at CNET conducted a comprehensive review of both Amazon's and Apple's digital music stores, with rather surprising results.

The entire review covered five areas: user interface, music library, compatibility, sound quality, and price. Although Amazon MP3 is slightly behind Apple iTunes in terms of user interface and number of tracks included, the two are tied in terms of sound quality. And in the remaining two areas, Amazon MP3 gets much higher ratings than Apple iTunes. Amazon sells digital music that can be played in almost any music player, whereas Apple, as usual, is obsessed with its own music file format and has only recently begun to offer music files without digital rights protection. In terms of price, Amazon MP3 also has the edge, with albums reaching a minimum price of $2.99 and some hits available for $0.79. Compared to Apple's iTunes songs at $0.99 and albums at a bite-sized price of $9.99, Amazon MP3's low-priced strategy has become an important factor in attracting users.

The ultimate advantage of Amazon's music store is still price. If a consumer buys a song while being attracted to other recommended items, and additionally buys a $200 MP3 player, Amazon will be more than happy to sell the song at a `price' of $0.79 or even less. The pricing advantage that comes with this kind of affiliate selling is something that Apple iTunes will never be able to have. And, of course, the boost that Apple's iPod has given to its digital music sales will be hard for Amazon to replicate anytime soon.

Benefits and Profit Model Analysis

Amazon as a typical B2C representative. The advantage of the online store is to save time and cost, consumers directly online to choose and order products can be, without the need for stores, suppliers save space and store rent. Amazon has more than 12 million customers in more than 160 countries, and 64% of the orders come from repeat customers. Amazon always puts the customer first, which fully embodies the concept of "Customer is God". The customer is God? The statement, these customers for the company has created a lot of economic benefits, but put a long line to catch big fish, far-sighted, to ensure the future development. And IT technology as the core competitiveness of Amazon, integrated into all aspects of Amazon, so that Amazon do better.

E-commerce hidden worries about the procurement challenges behind the crazy growth. Analyzed the Jingdong high growth behind the masked procurement channel problems, so that they are suffering, and even to the future buried a huge crisis. For example, the contradiction between long-tail purchasing and inventory handling, the pressure of grabbing goods and extending the hand of purchasing is arduous and so on. I see from the Amazon model that China's e-commerce is still at a very early stage of development and sigh. I hope that through the detailed explanation of the Amazon model can let you really appreciate how Amazon through technological innovation and business intelligence, how to subvert the traditional business model, to become a generation of e-commerce model or even a legend that no one can reach, igniting the dream and passion of e-commerce. 1995 Amazon began to sell the first book, and by 2006 the service spread to 7 countries, with 9 million square feet of 21 logistics sub-inspection warehouses.

Amazon's basic business started out like any other B2C platform, selling a wide range of products: beauty, clothing, accessories, food, sporting goods, pet supplies, books, CDS, DVDS, computers and accessories, furniture, toys, gardening products, bedding, and more. But it's not the huge product portfolio that makes Amazon a giant, it's the idea of providing customized services to its customers that sets it apart. If you browse Amazon.com for the second time, you will see not only discounted products and featured products, you can also see the recommended products, Amazon use the recommendation engine, silent records and observe your every move; at the same time if you implant a cookie in your hard disk, you will receive a lot of useful information: based on the last purchase of the recommendations; as well as other purchasers of the comments and instructions, etc., to greatly improve the customer's shopping experience.

Amazon's technology model analysis

1, search engine technology

An online store that lists all the products it has is unnecessary and inconvenient for users. Therefore, setting up a search engine and navigator to facilitate the user's purchase becomes an essential technical measure for the bookstore. In this regard, Amazon's home page does a good job, to books, for example, it provides a variety of comprehensive search methods: Keyword quick search. One or a combination of keywords can be typed. Keywords include author's name, book title or subject line; author search; title search; publisher and publication date search; books about children and young adults search; subject guide browsing. Readers can search the contents of the bibliographic database in a categorized manner by browsing by subject in the left column of the home page.

In addition to this, a series of navigators for best-selling titles, award-winning music, top-grossing movies, and so on, are also provided on any page of the bookstore, making it easy for users to conduct searches and guiding them through the process of shopping. This is actually a technical service, and is categorized as one of the pre-sales services.

2. Amazon Services

Now, Amazon has become a paradise for software developers. Among Amazon's newest additions to the family is a subsidiary called Amazon Services. Amazon sells its sales platform through Amazon Services, which provides complete Amazon e-commerce packages to companies trying to build or refine their e-commerce businesses. In addition, Amazon utilizes its own software and technology to build complete websites and provide technical support to other e-commerce companies. For example, Target Corporation not only has a store on Amazon.com, but it has also built and manages its own e-commerce site, Target Online, using Amazon services.

3. Customer Question Answering Technology

In addition to the search service, Amazon also provides the service of answering customers' common technical questions. For example, the company provides a special FAQ page to answer some of the questions that users often ask. For example, how to make electronic payments online? How much do customers pay for shipping? How do I order a book that is not on sale? And so on. And, if you have a personal question, the company will answer it for you.