E-commerce Change the World

According to a survey done by Verdict Research on 15 January 2009, Amazon.com was the UK’s favorite music and video retailer, and came third in overall retail rankings. In the financial perspective (source from Yahoo Finance), amazon.com has increased its revenue by 28.86% and increased on its net income by 35.50% in 2008 and it maintained its position as the No.1 e-tailer in 2008.

Nowadays, e-commerce has become relatively popular and many companies have been thinking to be benefited from e-commerce. But how does Amazon.com gain more competitive advantage and stand the best above others?

Evidence generated from case studies and literature reviews have shown that the success of amazon.com is depends on four main factors: customer service, variety of product, easy navigation on its website, and the value position.

Customer Service
Amazon.com is proud of its customer services and desires to be the best customer centric company. A study shows that more than half of the Amazon.com’s customers are repeat customers. This success is based on customer value proposition, which is conducted by Bezos, founder of Amazon.com. He suggests that amazon.com must give a positive impression to its visitors, so that the potential buyers will visit the virtual store again. For example, a cookie file will be store in the users’ computer and next time, the users will be greeted with the words such as “Welcome back, Marcus Shopper”. After that, shoppers will proceed to recommend new book from the same genre by Amazon.com according to shoppers’ previous purchases. Besides, Bezos also mentioned that Amazon.com need to fulfill their promises such as on time delivery. As a result, Amazon.com can strengthen its customer relationship.

Variety of product
Initially, Amazon.com is an e-tailing pioneer selling books via an electronic catalog from its websites. In order to cope with changing environment and meet customer needs, Amazon.com has expanded its business from selling books to variety of products and services which include media, electronics, other merchandise, and other services.

Easy navigation
The homepage is a company’s first impression to customer and most important opportunity to serve the customer. Easy for use and navigate must start from the homepage to give customer convenience. Amazon.com’s homepage provides personalized product recommendations, e-mail notices, reliable payment system, and interactive support for all the customers.

Value position
Value is like a goal of the organization and plays an important role in Amazon.com’s success. There are 2 strong values that are practiced by Amazon.com. These include customer satisfaction and operational frugality (cost saving). The value of customer satisfaction can be referred back to the “customer service”. In the other hand, the operational frugality helps Amazon.com to save cost in order to spend huge money on branding and business expansion. For example, Amazon.com’s employees are paid based salaries that are obviously less than competitive rate. However, Amazon sustains employee loyalty through employees’ ownership of company shares and let employees benefit from the business success with their contribution.