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Over the years, Amazon has established itself as a key global player in both the e-commerce and technology industries. The retail giant grew to its current size both by revolutionizing traditional business practices and wisely leveraging modern technology and is now famous for its market share, wide footprint and customer-centric user interface.
Whether you’re a big fan of Amazon or not, there’s a lot that businesses can learn from this dominant company’s business model. Below, 13 Forbes Technology Council members share some tech trends and business practices that have helped make Amazon so successful and what other leaders can learn from them.
1. Think Of Delivery As A ‘Product’
Amazon “productized” delivery with the invention of Amazon Prime. Thinking about delivery as a “product” sounds simple enough, but to back it up with operational excellence takes billions and decades. It’s a race that Amazon is winning against most of the world, as many retailers haven’t yet achieved the mindset that they too must think about delivery as a product, not a utility. - Bill Catania, OneRail
2. Enhance The Customer Experience Through Data
Amazon’s ability to personalize data prioritizes the consumer experience. Viewing all of a product’s information in one location (such as price, reviews and similar products) allows shoppers to make informed choices. Businesses today should innovate their current data infrastructure to show a range of information that lets a consumer make an educated decision based on what matters most to them. - Nate Maslak, Ribbon Health
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3. Encourage Innovation And New Ideas
Amazon embraces innovation through specific culture and process mechanisms, making it part of the leadership principles by which all employees and candidates are measured. Ensure there are pathways at all levels for new ideas to be considered. Develop a bias towards “yes” in trying experiments. Make experimentation inexpensive and data-driven, and reduce the consequences of failure on employees’ careers. - Anurag Gupta, Shoreline.io
4. Create A Culture Of Competition
Amazon’s cutthroat culture promotes a fast time to market and winning first. They compete internally across teams to produce what customers want before anyone else. This goes across all their businesses, from e-commerce and AWS down to newer, emerging businesses. Frugality is critical in achieving this without the distractions that often come with taking your eye off the goal and producing a maximum return. - Jonah Kowall, Logz.io
5. Seek Out And Engage The Customers Who Need What You Have
Learn how to find your customers and get them to engage with your offering! We have all seen Alexa blink yellow only to find out we have something in our cart or something we’ve bought previously that is back in stock. Amazon did and still does a great job of looking for the people who are looking for them. Then, meet customers in the most comfortable place possible—home! - Kevin Huber, IT Outlet
6. Build A Great Post-Purchase Experience
Amazon has mastered the post-purchase experience, which is why they are so successful. They provide clear instructions on how to track an order and return or exchange the item if it’s not what was expected. By providing a great post-purchase experience, Amazon builds trust with their customers and increases the likelihood that they will make future purchases. - Dragos Rus, WeSupply Labs
7. Focus On The ‘Flywheel’ Principle
Amazon has productized the invisible and changed customer expectations with its marketplace logistics and payments offerings. By understanding that a great customer experience goes beyond the website, Amazon is able to continue its virtuous cycle “flywheel” effect to attract more buyers, which in turn attracts more sellers, which in turn lowers prices and delivers a better customer experience. - Ryan Lee, Nautical Commerce
8. Feature Customer Reviews
One thing we can all learn from Amazon is the power of user reviews. A whopping 84% of people trust reviews as much as recommendations from friends. It’s safe to say that a big reason for Amazon’s success is they have reviews for every product you can imagine. Shoppers don’t need to wonder if a product will meet their needs; they can access thousands of honest reviews in seconds. - Thomas Griffin, OptinMonster
9. Relentlessly Iterate Based On Data
Amazon is relentless in analyzing data and using it to fuel how they deliver products and services to the marketplace. Early on, Amazon realized that low latency Web pages kept customers on their website longer, leading to higher conversion rates and increased profitability. Gathering data like this and understanding the business opportunity has been one of the greatest differentiators for Amazon. - Marc Fischer, Dogtown Media LLC
10. Create Developer-Friendly APIs
Amazon’s leadership recognized early on that if they wanted to maintain their agility while scaling up, they needed to decompose their business capabilities and associated teams. Jeff Bezos put out a legendary “API mandate” in 2002 that instructed all teams to expose their products and services through developer-friendly interfaces. This move worked for scaling and even paved the way for the launch of AWS. - Matt McLarty, MuleSoft
11. Be Adaptable
The story of Amazon is one of adaptability. Over time they have morphed their core business from retail to inventory management and finally to technology infrastructure. Amazon did not set out to become an IT leader, but leaders were willing to see opportunities and adapt the business to respond to changing needs—and they have done so in a way that complements their legacy business. - Malcolm Hawker, Profisee
12. Embrace Digital Transformation
Twenty years ago, Amazon understood the power of digital transformation well ahead of its time. As a result, it became an IT company with a warehouse full of products. Once companies understand and adopt the concept of digital transformation, they will turn it into a competitive advantage and dramatically disrupt their industries. - Victor Shilo, EastBanc Technologies
13. Commit To A Scalable, Sustainable Price Model
Amazon operates only low-price and high-volume business models, which, along with high-price and low-volume models (that is, luxury brands) are the most enduring business models. If Amazon can’t scale a business, it will not get into it. Every business can learn from this—mid-price and mid-volume models don’t often work. - Blair Currie, Snibble Corp.
