Amazon.com Essay #2

An In-Depth Analysis of the Amazon Inc. System

An In-Depth Analysis of the Amazon Inc. System

Amazon has become a company that permeates into our daily lives extensively. It was initially launched by current CEO Jeff Bezos as an online bookstore in 1995. However, the company rapidly expanded to include other popular items such as CDs, software, videos, and other similar items. (Bezos, 1999) The customer-centric company capitalized on its success in popularizing online shipping by investing into new markets and extensive diversification. (Bezos, 1999) Amazon’s rapid acquisition of various companies such as Zappos, Audible, and several other subsidiaries have shaped the company into the one that we are familiar with today. It is these acquisitions, new ventures, and the company’s innovative forays into automation that will continue to further shape the growth of Amazon. (Schneider, 2014) The users of the Amazon system are everyday people from all age groups and demographics; this accessibility to vast sects of consumers is partly what makes the company so successful. The company even operates extensively in international markets, running its services in 15 countries. (Schneider, 2014) Amazon has converted online shopping into an incredibly efficient, streamlined, and cost-effective process so that the average consumer is just as comfortable with the process as they are with shopping at brick-and-mortar locations. Some of the defining features of the Amazon system include 2 day Prime shipping, easy search features, recommended products, extensive customer reviews, and several others. The combination of the accessibility, ease of online shopping, and low prices that Amazon has been able to provide customers with has solidified it as the most valuable retailer in the country.

Characteristics of the Users of the System

A major aspect of this company’s success is the variability in the characteristics of their users. There is no specific demographic that Amazon targets or profits from significantly. The company has the greatest number of users in America, however, the company has a major online retail presence in India, China, Japan, UK and so the users of this system cannot even be narrowed down by nationality either. Amazon does target students via Amazon student; this program incentivizes students to open Prime accounts for half the usual price and gives them access to 2 day shipping and other Prime features. Overall, the company is incredibly diverse in the customers that utilize Amazon services. Families, students, young adults, seniors, businesses all rely on the fast shipping, low prices, and reliable product ratings which are the primary tenets of the consumer experience on Amazon. The company has made online shopping a way of life; consumers trust the company just as much as they trust a brick and mortar store when it comes to purchases, returns, refunds, product quality, and that is why there is no generic or definable Amazon user.

Features and Usage of the System

One user feature that is visible immediately is the search bar that spans across the top of the page. Clicking on the tab on the left allows the consumer to narrow down their search further into categories such as “Electronics” or “Home and Kitchen.” As you type in the product that you are looking for, the most popular suggestions immediately drop down below, expediting the process. Once you type in the product and hit enter, the most relevant and popular purchasable options for this product appear. You can click on the various purchase options and explore each one further, read the reviews, compare and contrast them until you decide on which one to purchase. On the search page itself for the product are more helpful features. To the left appear categories that can help you further narrow the product down, these can include size, color, configuration, brand name and other features relevant to the product. If you were searching for a laptop, this column on the left would include screen size or RAM or Graphics and the consumer could click on any specifications to further narrow down their search. The search process features are extremely efficient and simplified more so than going to a brick and mortar shop and sifting through all the options manually until you find what you’re specifically looking for.

Another extremely important component of the Amazon system is the customer reviews. These reviews give Amazon a significant advantage over standard retailers. At brick and mortar stores, customers might be overwhelmed with the myriad options and configurations of a particular product and not have sufficient background knowledge of the product. Amazon helps resolve this by showing which option of the product is most popular, most reliable, and has all the features or characteristics the consumer wants. On the page of each product, there is the option for previous customers to leave unbiased reviews of the product. If a consumer clicks on the “customer reviews” for any given product, Amazon shows accurate breakdown of how each reviewer rated the product from 1 star to 5 stars. The reviews are then ranked automatically by helpfulness so that the most helpful reviews are what the consumer can read first in order to make an informed decision about the product. Consumers can also ask questions to other customers or directly to the seller before purchasing the product, they are often answered in a quick and thorough manner. Helpfulness of the reviews is determined by votes from other users. The answers to the questions also get voted upon so that helpful questions and answers rise to the top as well. This “rise to the top” configuration when it comes to searching for the product allows for the most popular product options to appear first on the search page, it allows the most helpful reviews to appear first in the review section for the product, and the most useful questions and answers to rise the top as well in the customer Q&A section for the product.

On the product page itself, Amazon suggests other similar options that other consumers may have bought or looked at so that you can also venture into looking at other options of the same product. You can click on images of different product choices and be taken to the Amazon product page for it. For example, if you were looking to purchase a Toshiba Chromebook and were on its product page, the related items might be Asus Chromebooks or Samsung Chromebooks. On certain product pages, Amazon automatically creates a side-by-side comparison for the consumer so that they can look at the pricing, ratings, relevant features, lack of certain features of different product options so that the consumer can look at the best options for the product and then make an informed decision. So back to our example, Amazon might create a table that compares features and pricing for the Toshiba, Samsung, Asus Chromebooks and display this table on each product page to allow the consumer to make a more informed choice. These features, along with the customer reviews system and the Q&A options makes it so that even uninformed buyers who might not have done any previous research can conduct thorough research into the product and similar options, just by appropriately utilizing these features.

Best rated product option appear first, on the left are categories to further help customer narrow down.

Customer Q&A on the Product Page, with the most helpful Q&A first

Side by Side Comparisons on the Product Page

Customer Reviews on the Product Page, with percentage breakdown of how reviewers voted and the most helpful reviews first.

Impact of the System

The impacts of the Amazon system are ubiquitous and easily understood. Valuable time, effort, and money are all saved by utilizing the Amazon system and this is the driving force behind why Amazon appeals to consumers to such an extent. Users can research the product, narrow down according to the specifications and budget, read others’ reviews and view pictures and videos of the product, order the product for cheaper than most brick and mortar stores, and then the user can click a button and have that product on their doorstep within 2 days using Amazon Prime. If they are not satisfied with the product for whatever reason, they can simply print the shipping label out and send the box back in its package from the local post office for free. The convenience and integration of so many aspects of the buying process is what makes Amazon unbeatable. People are becoming more comfortable doing their product research and product purchasing from the comfort of their own homes, knowing that it will appear on their doorstep in just 2 days. As Amazon expands in other ventures such as Amazon Fresh or Amazon Pantry, it will further begin to alter our consumer experience. Amazon Fresh allows users to order deliveries from the website or a mobile app and the groceries are delivered fresh to your doorstep within the day. Amazon Pantry allows for users to order bulk goods that they might otherwise purchase from Costco and these goods are shipped directly to their door. Businesses or families can set certain items onto a “subscribe” feature so that the same product automatically is shipped to your house or office at preset time intervals. Users of this new, expanding Amazon can already do their online shopping comfortably but soon will also be able to have their groceries automatically delivered and have bulk goods shipped to themselves, if they choose to do so. Automation is integrated into mobile apps, the website itself, it has already been integrated into the Amazon Echo which is a “voice command device” which allows users to order products simply by asking the Echo to do so (amongst other features it has), it has been integrated into “dash buttons” which allows users to push a button to order the correlating product, and into the “Amazon wand” where users can scan barcodes to re-order a product that is running low. The impact of these numerous features is phenomenal. People will have more free time to do what they please because Amazon is allowing them to not spend so much time going out and making purchases, grocery shopping, or shopping at Costco. Families can spend more quality time with each other rather than having to spend time running errands or going to the mall. People will theoretically save more money since Amazon products are often cheaper and also because consumers are making more informed purchases and focusing on just what they need to buy, rather than going into the store and being enticed by other products and options. People can purchase items confidently, and as informed consumers, without having to do any previous research because all the extraneous information is available to them immediately. The whole system has been designed around the premise of user convenience and Amazon successfully serves that purpose.

A negative impact of Amazon would be that increased automation and expansion of this automation can impact other industries negatively. If more consumers are shifting towards online shopping and eventually grocery delivery, bulk goods shipped to their house, e-books via Kindle then this will hurt brick and mortar stores, it will hurt bookstores, grocery stores and other industries that Amazon takes business away from. Although the industries will also eventually shift according, for example, your local grocery store might start offering delivery too just to compete with Amazon, the problem is that people might lose their jobs initially. If Amazon was able to bring to fruition its concept of having drones deliver packages, it might eliminate the need for mailmen. It would take time for these people who are laid off to find new jobs and establish a new skill set that the economy desires. Amazon can create new features faster than the rest of the industries and employees can evolve; Amazon’s growth can occur at a heavy cost to other competing industries.

Conclusion

Amazon has stayed true to its roots as the company has evolved into its current state, and that is maintaining customer service and convenience. The company is a dynamic one and will continue to evolve and expand into new territories, such as automated ordering using voice technology, grocery delivery, ordering via scanning wands, or having packages delivered using drones. Successfully conquering these territories will mean that Amazon will be able to guide its consumers towards increased automation and new advanced services. Amazon has already been incredibly successful in encouraging not only America, but most of the developed world to embrace online shopping and Amazon has built consumer trust in their brand. Amazon could capitalize on this by leading the customers towards being comfortable with other new technologies that would allow for simplifying their life and saving time and money. Overall, this will change the face of how the average consumer goes about their daily life because they could entirely cut out shopping at the mall, at grocery stores, going to the post office, and other simple errands, and replace this time with time spent doing something they value more. Amazon has already surpassed Walmart just this year as the most valuable retailer in the country. If Amazon continues on this trajectory, they will certainly diversify and expand to the extent whether they will increase convenience and efficiency in a multitude of domains and improve the lives of consumers everywhere.

References

Schneider, L. (2014). Amazon.com Profile - History of Amazon.com and information about Amazon.com. Retrieved October 4, 2015, from http://jobsearchtech.about.com/od/companyprofiles/a/Amazon.htm

Hartman, P., Bezos, J. P., Kaphan, S., & Spiegel, J. (1999). U.S. Patent No. 5,960,411. Washington, DC: U.S. Patent and Trademark Office.