Online Shopping and Amazon

Amazon.com: Customer Service Champion

11/3/2013

Abstract:
This paper is about the customer service that is offered at Amazon.com. Amazon is a re-tailer that offers products at a responsible price. Amazon has evolved from being an online bookstore and they have become one of the largest e-commerce platforms in the world where customers could find and discover anything they wanted to buy online in a more convenient way. With customer service, loyalty, and customer retention were the three important aspects of Amazon's that it offers. Amazon has increased their sales significantly due to its high levels of customer service that they provide. In addition to consumer customers, Amazon offered marketing and promotional services for third-party retailers and web services for developers. It allowed third party vendors to sell their products on its website.

Amazon is a well-known company that was founded in 1995. It is best known for selling the Kindle, offering low competitive prices, offering fast and responsible cost with shipping that is reliable. Everything could be sold online all at the click of a button. “In 2009, US-based online retailer Amazon.com, Inc. (Amazon) topped BusinessWeek's 2009 annual list of customer service champs”(Qumer 2010). Amazon is completely a customer service company that concentrates, on making sure that the customer is happy and taking care of. Which is reflected in their company values and what they believe in. Amazon was considered to be one of the most customer-centric companies in the world where customers could find and buy anything they wanted online at the lowest possible prices. Delivering excellent customer service and offering compelling value to its customers had been the core strategy of Amazon since its inception.

Amazon focuses on being loyal to their customers, when they are loyal to them they figure that in return their customers would recommend others and continue to shop with them and make future purchases. Amazon makes sure that the infrastructure is taken care of so that the retention is there. When the retention is there they will continue to grow and expand their product lines so their customers will not have to take their business elsewhere. To make sure that the customer satisfaction is taken care of they live by Sic Core Values to make things happen to make sure that everything stay in order. The first on they have is Customer Obsession: With customer Obsession they start off with the customers and work backwards to make sure that things are taken care of. Secondly, Amazon includes innovation. Amazon says that if you do not listen to your customers, you will fail and if you only listen to your customers you will fail. You have to be able to find the balance. Third, you have a Bias for Action which is living in time of unheralded revolution and insurmountable opportunity and provided that they make every opportunity count. With the Fourth thing you will find that Amazon will take ownership when it comes to building a great company. Fifth they will have a High Hiring Bar that they often ask themselves” Will I admire this person? Will I learn from this person? Is this person a superstar? All of those important questions Amazon will ask themselves when they are looking to hire you. Lastly, they have frugality, where they spend money on things that really matter and believe that frugality breeds resourcefulness, self-sufficiency and invention. In the future I do believe that Amazon should continue to find unique ways to reach consumers to continue to win them over. Right now Amazon should continue to grow their customer base and continue to grow social media awareness and continue to post the review of the consumers who have purchased products and how they were impressed with the arrival and how they love using what they purchased.
With the role of Jeff Bezos in creating a customer-centric culture at Amazon he has done an awesome job working on Amazon and making sure that they continue to grow.
Jeffrey Preston known as "Jeff" Bezos was born on January 12, 1964 and is an American Internet entrepreneur and investor. He is a technology entrepreneur who has played a key role in the growth of e-commerce[5] as the founder and CEO of Amazon.com, an online merchant of books and later of a wide variety of products. Under his guidance, Amazon.com became the largest retailer on the World Wide Web and a top model for Internet sales.” Bezos, J. (2013). Retrieved “Bezos believes that if you fix the customers problems then customer loyalty will be built from that. Jeff Bezos said his main goals are to provide his own perspective to the paper's managing staff and to ensure the financial stability of the "Post" while it experiments with ways to be profitable. Though he'll be active in leading the plans for the "Post," he plans to continue living in Seattle and will remain the chairman and chief executive of Amazon.com. While the "Post" purchase took many by surprise, especially given the state of print journalism, it makes sense within Jeff Bezos' unconventional business philosophy. He has said that Amazon.com management is "willing to be misunderstood for long periods of time." He prefers to be patient and accept losing money for several years if he believes the long-term investment is worth it. He's also known for an approach that puts customers' needs and desires over everything else. Lots of retailers give lip service to that approach, but Amazon.com truly incorporates that philosophy into everything it does.
Jeff Bezos might not do things the traditional way, but many would point to his unconventional approach as the foundation for the incredible growth of Amazon.com. His principles of growth over profit, long-term investment, and prioritizing the customer have made Amazon.com the worldwide online retailing leader. If anyone can find a way to pump new blood into traditional journalism, it might well be him.” (Beyond.com)
Amazon did understand the integration scenarios and their impact on retailers, “let's look beyond the financials and think about Amazon's probable thought process in the transaction: Shoes are a $40b category (online and offline) and comscore reports that online apparel in 08 was $23b. While Amazon doesn't disclose their apparel/shoe sales, they are definitely much smaller than Zappos. Thus this creates a clear leader in the category and gives Amazon mass in a third category (media, electronics, apparel). Amazon's CFO said on the conference call last night: "...this (the Zappos acquisition) is not about synergies. This is about growing in categories that we think are interesting.” Amazon did $4m in 08 revenues in EGM (non-media categories) - Zappos' approximately $1b in GMV grows this 20% overnight. Also, Zappos was a large competitor to Amazon's apparel business and forced them to come out with www.endless.com to counter the threat. According to compete.com, Zappos has about 6m visitors/m and endless is stuck in the 1m range. While amazon says they won't close this, they can definitely stop spending marketing dollars on it so there's going to be some savings there.
There are also some shipping synergies. By injecting the Zappos' approx 10m shoe shipments into the Amazon fulfillment engine, Zappos could save as much as $1/shipment which would effectively grow their profits by 50%. I also wonder if Amazon has any interest in the Zappos robotic fulfillment system and would consider moving that into their fulfillment centers to increase efficiency. Some have suggested that one driver could be Amazon wanting to sell prime to the Zappos audience. That doesn't make sense to me as with the Zappos free shipping model, why do you need Prime at all? I don't think Amazon would mess around with the Zappos model and move to something like normal S+H, free with Prime. The bottom line is Amazon gets a potentially 4-win scenario here: (1) good valuation, (2) eliminate a growing competitor, (3) grow EGM 20%, and (4) cement a leadership position on a big category (shoes+apparel). With putting this move into play I would say was the might move for both companies. Zappos focused on delivering WOW through service, they embraced and drove change, Created fun and a little weirdness, they were adventurous, creative and open minded, pursue growth and learning, built open and honest relationships with communication, built a positive team and family spirit, do more with less, be passionate and determined and they were humble. All of those core values made Zappos. “("Analysis and retailer," 2009)

Reference:

Analysis and retailer impact of amazon's acquisition of zappos. (2009, June 24). Retrieved from http://www.amazonstrategies.com/2009/07/thoughts-on-the-amazon-acquisition-of-zappos.html
Beyond.com (http://www.beyond.com/articles/jeff-bezos-and-amazon-s-unconventional-business-13138-article.html)
Bezos, J. (2013). Retrieved from http://en.wikipedia.org/wiki/Jeff_Bezos
Qumer, S. (2010). Amazon.com: Customer service champion. IBS Center for Management Research,