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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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Amazon: one step ahead of the competition

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AMAZON SET THE standard for ecommerce when it first burst onto the market in 1995. Today it remains a market leader, recognised for strategies that set the benchmark for other retailers to match. Speed and convenience remain – as reported in last year’s Strategy & Innnovation Performance Dimension Report – its strategic aims, while it’s consistently innovative.

Since last year, it has introduced its one-hour delivery promise Prime Now further into the UK market, while AmazonFresh offers speedy grocery deliveries to London postcodes and other parts of the UK. As with other services, Amazon has continued to develop this latest service in the light of customer response. Commenting on the service as it expanded within London this year, Ajay Kavan, vice president of AmazonFresh, said: “The initial response we have received from customers in the capital has been very positive, with many calling out low prices, vast selection and fast delivery as their reasons to shop on AmazonFresh. We are honing and improving our offer based on customer feedback, and will continue to do so.”

In addition, Amazon’s Dash Button and replenishment service have now been launched

in this country, promoting Internet of Things-boosted convenience. This and other nimble delivery services, built on the capable foundations provided by a network of hubs to house stock

and the Amazon Logistics platform that outsources deliveries to third-party carriers, are available only to members of the Prime subscription scheme.

It’s in this membership scheme that Amazon’s strategy now seems rooted. Customers who pay

to join the scheme benefit not only from faster and cheaper delivery, but from a range of other benefits and discounts, from free TV and music downloads to use of the Kindle owners’ lending library. The second annual Prime Day saw sales up by 60% on the previous year. SimilarWeb analysis suggested that the first day, back in 2015, was the sixth-biggest online shopping day of the year, after events including Boxing Day and Black Friday, the pre-Christmas shopping day that Amazon helped to introduce from the United States. At the time, Greg Greeley, vice president, Amazon Prime, said: “Prime itself is the best deal in the history of shopping and Prime Day was created as a special benefit exclusively for our Prime members. We want to thank our tens of millions of members around the world for making this the biggest day in the history of Amazon.”

Prime works for Amazon not only because it rewards customers’ loyalty, but also because it discourages shoppers from going elsewhere. It’s not surprising, then, that Amazon has proved a tough competitor to beat. InternetRetailing senior researcher Martin Shaw says: “Amazon somehow manages to be at the forefront of every ecommerce trend. It endeavours to be convenient despite a lack of physical stores, and its efforts are recognised in a Dimension that rewards the physical convenience that multichannel retailers find easier to offer.”

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