Amazon is, by almost two decades, the youngest retailer to feature in the Elite ranking of the RXUK Top500 2020. Yet the 21-year-old is the only one to have featured in that top ranking every year since the series was launched in 2015. It’s done that despite having what some might see as disadvantages.
It’s an online-only retailer in a multichannel and ecommerce industry that has discovered the huge advantage of shops as a place to collect and return online orders. It also broke into an industry dominated by long-standing heavyweight retailers, and it did so at a time when shoppers did – and still do – prefer to buy in shops. But in a relatively short period of time, the retailer has led a change in the way shopping works, both for its own customers and for those of other retailers. But how?
Doug Gurr, who leads Amazon in the UK, says its strategy is simple – it starts and ends with the customer.
“At Amazon, everything we do is underpinned by customer obsession, so the customer is most important to us now and always will be,” says Gurr, Amazon’s UK country chair. “It is the fundamental principle that drives our business today all around the world.
“Our strategy for customer obsession is simple – start with the customer and then work backwards. Looking ahead, we will continue to measure ourselves in terms of customer-centric metrics. We invest for the long term and will continually refine and improve our offerings based on customer feedback.”
If Amazon can’t easily give the customer what they want, it stands ready to make it up. Amazon’s second key focus is firmly on innovation. “We love to invent for our customers,” says Gurr. “When we are innovating, we always start with the customer and work backwards, striving to provide them with ever-better convenience, selection and value.”
Investing in talent
In order to deliver that innovation for the customer, the retailer invests heavily in developing talent across the UK. “We have ramped up UK investment to house 1,000 additional highly-skilled roles in Manchester, Edinburgh and Cambridge, while across Europe, we will be providing space for over 5,500 highly skilled researchers and developers working across Amazon’s 25 development centre sites,” says Gurr. “These jobs range from machine learning scientists, robotics engineers and solutions architects to software, hardware and flight engineers.”
Such investment is set to continue well into the future. “In 2020 and beyond, we will keep innovation competitive by continued investment in hiring and training a diverse workforce,” says Gurr. “At Amazon, we believe the key to innovation is diversity – whether that is having global R&D (research and development) teams across geographies to understand local issues, or encouraging more women to enter STEM (science, technology, engineering and mathematics) careers through our Amazon Amplify programme. We want to attract and retain the best and brightest talent across the world to foster greater innovation and raise the bar for customers.”
Why stores matter
Despite its role as a pureplay retailer, Amazon is clear that it represents only one part of retail, and that shops remain important to its customers. Gurr points out that in December 2019, only 21.3% of UK retail sales were made online, according to the Office for National Statistics (ONS). That suggests, he says, that, “79% of UK shopping by value remains in physical stores.” The Amazon response? To launch its own stores in partnership with the type of retailers that sell on its own website (see picture caption above). “In June 2019, we launched Clicks and Mortar, a pilot programme to help up-and-coming online brands sell in store for the first time,” says Gurr.” By working with small business support network Enterprise Nation, we have helped more than a hundred small online businesses test physical retail for the first time with Clicks and Mortar pop-ups in Manchester, Cardiff, Edinburgh, Sheffield and Leeds, with more to come this year.”
Despite the retailer’s success so far, it says it won’t rest on its laurels. Instead, it still believes there’s much more to do. “At Amazon, we often say, ‘It’s still Day One’,” says Gurr. “We’ve only just begun and there’s still so much more to come. In truth, none of us know where customers will take us next. That is a challenge, but an exciting one, and that is the beauty of innovating on behalf of our customers.”