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eCommerce Insights

Five reasons why Amazon is still the number one

When you take a look at how the eCommerce market is structured in – let’s say – the United States, the UK or Germany, there can be no doubt that first of all one player is leading the field: Amazon. While Amazon was able to count as many as 1.104 billion visits to its German marketplace Amazon.de during the second quarter of 2016, the number two – eBay.de – has been far behind with only 713.28 million visits. And the situation is the same in most of the other countries across the world. So there must be a reason why Amazon was able to become that succesful and to retain its leadership. We believe there are at least five things other retailers can learn from Amazon.

 

1. Be a first mover

When Jeff Bezos founded Amazon as an online bookstore back in 1994, only a few optimistic visionaries such as Pierre Omidyar expected the eCommerce industry to become a multi-billion dollar industry. But Bezos’ courage paid off – because Amazon didn’t need to fear tough competition during the first years of its history and was thereby able to grew from a niche player to the world’s most dominating digital marketplace. Bezos’/Amazon’s success story shows that Blue Ocean can be a strategy to grow a company from a niche player to a multi-billion dollar business.

 

2. Pay attention to your customers needs

When it comes to shopping consumers can still be differentiated into two groups: One that likes the comfort of purchasing things online and get them delivered right to their door and one that makes the effort to visit a local store to directly receive a product. Amazon has identified this problem and launched several delivery types such as same-day delivery and “Prime Now”  to fit the needs of typical offline buyers and thereby boost it’s business activities.

 

3. Grant discounts not grudgingly, but with pleasure

Literally nobody wants to pay too much and that’s exactly the reason why consumers are subconsciously hungering for discounts and the pleasant feeling of saving money. During the last couple of years Amazon has adapted (Black Friday, Cyber Monday) and invented (Prime Day) several events to not only satisfy its consumers’ hunger for discounts, but invite and enable them to celebrate a huge “discount festival”. The figures show that this strategy is dead right: The last “Prime Day” (July 12)  was the biggest day ever for Amazon. It surpassed Prime Day 2015 by more than 60% worldwide as Amazon sold more than seven million products in just one day.

 

4. Build up close and sustainable relationships

Amazon was one of the first eCommerce companies that realized the potential of affiliate marketing and build up close and sustainable relationships to thousands of wide-reaching publishers across the world. This effort still pays off: In the second quarter of 2016 Amazon was able to generate 18.58 per cent of its reach, respectively 205.21 million visits to its German marketplace, just by partnering with websites such as price comparison engine idealo.de and social commerce platform mydealz.de.

 

5. Evolve

“Embrace the change” and “Evolve or die” are definitely two of the most worn-out business phrases, but Amazon’s success story clearly shows that it always pays off to pivot and extend the own business model. Of course, it’s important to build up a recognizable brand, but would Jeff Bezos has been able to build up a worldwide market-leader with more than 230,000 employees if he didn’t turn Amazon from an online bookstore into a digital marketplace?