Amazon is an e-commerce platform founded by Jeff Bezos on 5 July 1994. Initially, Amazon is known for the online books marketplace, where people order books by browsing the website.
Amazon, currently with a strength of 1,608,000 employees, has 100 million registered users and over 90 million daily visits. Amazon’s technology has enabled it to deliver 1.6 million daily shipments, and it’s increasing yearly.
In contrast, Amazon is the leading platform in the e-commerce industry. The company’s total revenue last year was 46,980 crores USD. So, in this article, we will share with you a case study of amazon and describe its marketing strategy.
Amazon: Warehousing & Shipments
Logistics is a considerable crucial aspect of any successful e-commerce platform. So, California has the most operating or planned Amazon distribution centers at 35, followed by Texas at 28 and New Jersey at 17. The E-retailers’ distribution centers are close to many consumers, with eight of the ten states with the most Amazon warehouse square footage among the top 10 in the population.
Amazon has 1,137 distribution centers.
In addition to locating mammoth warehouses such as the ones BigRentz tracks near big cities, Amazon is also opening many smaller facilities that sort packages for last-mile delivery to consumer homes.
Amazon operates 1,137 fulfillment centers of various types in the U.S., with announced projects to open 331 more. According to logistics consulting firm MWPVL International Inc., Another 47 warehouses operate in Canada, with an additional 26 on the way, MWPVL says.
That ecommerce warehouse count puts Amazon far ahead of its biggest general-merchandise retail rivals, Walmart Inc. and Target Corp.
Amazon Success Story
Because its focus is on the customer’s demands and perspective and not on building itself against the competitor, ideas and innovation mainly drive Amazon’s success story. Jeff Bezos, the Ideator-in-chief, welcomes unconventional ideas and concepts and then relates them to new technologies.
Jeff Bezos thinks that ideas stroke up growth. Against everyone’s will when in 2007, Amazon launched itself into an electronics device: Kindle E-Reader. It proved to be a confidence-boosting game changer. And later on, Amazon brought in Echo and Alexa speaker devices with more than 30,000 skills to bring verbal solutions to people’s problems.
Amazon focuses on delighting its millions of customers with free shipping, lower prices, a varied range of products, timely delivery, and great customer support.
Following are some of the points that made Amazon stand out in terms of innovations, experimentation, and Risk-taking:
1. Amazon Go
Amazon has also introduced Amazon Go, an automated convenience store that has changed the shopper’s shop. The customers enter the store, are asked to download the Amazon Go app and scan the QR code at the store entrance, start taking things, and leave with bags full of items.
These stores are like any other departmental store minus the cashiers, where the customers don’t have to wait in queues for their cart items to be scanned for payment. The customers with the Amazon Go app are charged for what they leave the store with. To this date, there are 11 Amazon Go stores.
2. Amazon Prime:
Amazon Prime is a yearly membership that allows the member benefits and deals on products, faster or same-day (in the eligible PIN code areas) delivery, lower prices of the items, unlimited access to online movies, kindle books, etc.
45% of Amazon’s growth because of Prime membership in 2017 reached 51% in 2018; 90 million subscribers in the U.S.
Amazon has offered its customers the one-click checkout. Amazon aces because it focuses on making its customers’ shopping experience on the website better than before. The E-Commerce company considers itself the biggest challenge as it has raised the bar standards in the entire e-commerce business industry.
Amazon has now offered a platform for people to sell. The users can register as sellers, enter their products on Amazon, and sell them, enabling a wider market.
3. Amazon Pay
Amazon Pay has made payments easy with the 1-click option. Almost everything is available on a single platform, like movie ticket booking, flight booking, electricity bills, and phone bill payments.
Considering the Amazon pay feature, if it adds more apps like commute booking, Hotels & Restaurants booking apps, and other commercial apps, it will emerge as a super app. But we don’t have any information on their future updates or plans.
Digital Marketing Strategies
As you can see in the below chart, amazon is using by people worldwide. But the company focuses on six central countries: the United states, Canada, India, Germany, Italy, and Spain.
- Marketing Channels Overview: amazon.com receives traffic from direct (59.78%) and search (26.40%). An underutilized channel is “ads.” (On Desktop, Worldwide)
- Audience Demographics: Audience composition can demonstrate a site’s current market share across different audiences. amazon.com’s audience is 59.71% male and 40.29% female. The largest age group of visitors is 25 – 34-year-olds. (On Desktop)
Amazon is known for its creative video advertisements. It also makes particular investments in star power and celebrity marketing. Amazon keeps on collaborating with various famous personalities year after year.
One of the memorable and recent advertisement campaigns was “#AurDikhao.”
Amazon – had seen a significant increase in its television commercials since August, when they were acquired by US retail giant Walmart. The last time Amazon launched a branding campaign with the tagline ‘#DevliverTheLove’ was when it spent massive marketing dollars to create brand awareness.
SWOT Analysis of Amazon
The SWOT analysis of Amazon is given below:
Amazon’s Strengths – Internal Strategic Factors
1. Strong brand name – As a global e-commerce giant, Amazon has a strong position and a successful brand image in the market.
2. Brand valuation – According to Interbrand’s Global Brand Ranking 2021, Amazon is ranked at the #2 position (Apple at #1 and Google at #3), with a brand value of $249 Billion.
3. Customer oriented – Amazon caters to many customers for everyday needs at low prices. This has made it a customer-oriented brand.
4. Differentiation and Innovation – Amazon frequently brings creative ideas and innovations to its product lines and offerings like ambitious drone delivery service and Withings Aura Smart Sleep System. This creates differentiation from other companies.
5. Cost Leadership – Amazon doesn’t incur costs in maintaining physical retail stores by selling everything online. With economies of scale, Amazon efficiently controls costs and lowers inventory replenishment time. The company has formed numerous strategic alliances with companies like Evi Technologies, Thalmic Labs, Shoefitr, The Orange Chef, etc. It has a robust value chain system that helps maintain a low-cost structure.
Amazon’s Weaknesses – Internal Strategic Factors
1. Easily imitable business model – Online retail businesses have become quite common in this digital world. So imitating Amazon’s business model for rival firms is not so difficult. A few companies are even giving Amazon a tough time. These include Barnes & Noble, eBay, Netflix, Hulu, Oyster, etc.
2. Losing Margins in a Few Areas – In a few areas, such as India, Amazon has faced losses. Free shipping to customers can be one reason that exposes the risks of losing margins in some markets.
3. Product Flops and Failures – Its Fire Phone’s launch in the U.S. was a big failure, while its Kindle fire device didn’t grow well.
4. Tax Avoidance Controversy – Tax avoidance in Japan, the U.K., and the U.S. has sparked negative publicity for Amazon. President Trump criticized Amazon over taxes on social media.
5. Limited brick-and-mortar presence – Amazon owns minimal physical stores. This sometimes hinders attracting customers to buy things that are not sellable in online stores.