5 impacts that Amazon has had on customer experience
Last month Amazon turned twenty. In 1994 founder Jeff Bezos left his job, drove to Seattle and set up the business in his garage. Originally going to be called Cadabra (as in Abracadabra), the name changed to Amazon after fears that people would mishear it as “cadaver”. It now offers over 230 million separate items for sale in the US alone and had 2013 revenues of $74.5 billion.
Amazon has radically changed how consumers shop, read and watch films, and affected a wide range of industries, from bookselling to video rental, and now, with the new Amazon Kindle Fire phone, mobile telecoms. So what have been the 5 key impacts on the customer experience?
1. Make it simple
As a web-based business Amazon has focused on making the customer journey as straightforward as possible. Ideas like One Click shopping (and now ordering via Twitter) ensure that the checkout process is fast and simple, without consumers having to re-enter credit card details or addresses. This also applies to customer service. If consumers have a query or want to return an item information is readily available and automated, with the maximum use of self-service, supported by channels such as web chat and email.
2. Share the experience
Amazon was the first company to introduce customer reviews and has made them central to the online shopping experience. Now, almost every retailer provides an opportunity to review the product that you have just bought – even down to a pack of nails from a DIY site, while most people won’t make a major purchase without checking relevant reviews on both products and the retailer itself.
3. Offer what customers want
Twenty years ago, customers were limited in what they could buy through the physical size of their local shops. The internet changed all of that, but led to the opposite problem – too much choice. Due to its size Amazon is able to capture a huge amount of data and uses it to deliver personalised offers and recommendations based on previous purchase history, tailoring information to particular customer needs.
4. Keep innovating
When Amazon started, people saw it solely as an online bookstore. However, this was never the long term goal – it was simply a start point to build customer trust in the then new experience of buying online. Since then Amazon has expanded far beyond retail – offering streaming services, digital downloads and physical hardware such as the Kindle ereader, Fire tablet and new Fire Phone. These not only integrate closely with the retail side of the business, but add innovative new features. For example, the Fire Phone has a near 3D screen and the ability to provide information on anything it sees or hears. Amazon has never rested on its laurels, and is continually moving forward.
5. Always put customers first
Compared to competitors with physical stores, Amazon operates on very low margins. From the beginning Jeff Bezos talked about being focused on customers, rather than competitors, and taking a long term view. It is rumoured that its core retail business just breaks even, and overall profits are still small compared to total revenues. Amazon’s strength is that it aims to think like a customer and provide what they want, building loyalty in a crowded market.
The internet has radically changed consumer behaviour over the last twenty years, widening choice and shifting the balance of power between companies and customers. Amazon has been at the heart of this and is helping reshape how we shop, both now and in the future.